Workshop by Roger Rohner and Ralf Imstepf on the occasion of the ISIS) seminar on June 3 - 4, 2024 entitled "Update on VAT"
Note: This language version is an automatically generated translation. The text may therefore contain linguistic and terminological errors.
view in original language (German)Ms. Livia Wenger, a resident of Wohlen (AG), owns a commercial property in Rümlang (ZH) as part of her private assets, which she inherited from her mother in 2022. Her mother had purchased the property in 2015, including VAT. Like her mother before her, Ms. Livia Wenger has opted for VAT treatment regarding the rental of the commercial property.
Since Ms. Livia Wenger is also planning further real estate transactions and does not want to run the risk of eventually being classified as a commercial real estate dealer, she is transferring this property, along with others, to her newly founded Wenger Immo AG, based in Wohlen.
According to the practice of the Zurich Cantonal Tax Office, a contribution value of 75% of the market value is accepted. The market value is CHF 5 million; the property is contributed to Wenger Immo AG at a value of CHF 4 million. The VAT option for the rents is to be maintained.
After the transfer of the commercial property, Ms. Livia Wenger deregisters from the VAT system.
One year later, she contributes her private vehicle, valued at CHF 65,000, as a contribution in kind to Wenger Immo AG. The contribution value is recorded as CHF 50,000 against a premium. The vehicle is used by her in her capacity as managing director of Wenger Immo AG.
Another year later, Wenger Immo AG provides Ms. Livia Wenger with an SBB General Subscription (or alternatively an SBB Half-Fare Subscription).
Pegasus AG, which is registered in the VAT register, owns an aircraft registered in Switzerland. In connection with the import and operation of the aircraft, input tax in the amount of CHF 2 million is incurred in 2022.
In 2022, the aircraft is used for 1,000 flight hours as follows:
Phaethon AG, registered in the VAT register, rents underground parking spaces for luxury cars and operates a car care workshop. As of December 31, 2022, Phaethon AG owned two classic cars. These are also made available to Phaethon AG’s sole shareholder, Mr. Bellerophon, for private use. Mr. Bellerophon is also provided with a company vehicle.
Mr. Bellerophon is the sole shareholder of Fides AG, which operates in the trust business. Since January 1, 2022, Fides AG has also been the owner of a vacation home in Goms (Canton of Valais). The vacation home is available for Mr. Bellerophon’s exclusive use. For this, he pays Fides AG a market-rate fee, which is subject to taxation at the special rate of 3.7%. Fides AG anticipates a total input tax surplus of CHF 40,000 over a holding period of 20 years.
Fabrik AG, headquartered in St. Gallen, owns a property in St. Gallen. Until the end of 2022, it operated a factory on the site, during which time it was able to fully deduct input tax. In 2023, the zoning is changed from industrial to residential. Fabrik AG subsequently develops a concept for the development of residential properties.
After ceasing operations at the factory at the end of 2022, Fabrik AG temporarily subleases the former factory property to various tenants, retaining an option on the leases. However, these leases are limited to two years, with the option to extend them on a short-term basis until construction of the residential development is finally set to begin.
In the fall of 2023, Fabrik AG finds a buyer for the property, namely Immo AG, based in Zurich. Immo AG takes over both the lease agreements with the right of first refusal and the development project for the residential complex. However, the start of construction is delayed, so the lease agreements are extended on a short-term basis until demolition of the factory and construction of the new building finally begin in 2027.
1 Inspired by Federal Supreme Court, Sept. 13, 2022, 2C_876/2020.
Following an audit at Janus GmbH, the FTA corrected the tax claim by CHF 20,000 in its favor via a notice of assessment (NA) dated June 18, 2018 (tax period 2011). Of this amount, Janus GmbH paid the sum of CHF 15,000 on July 9, 2018, without reservation, in connection with the additional assessment of purchase tax and private shares.
In a tax assessment dated January 13, 2017, the FTA demands an additional payment of CHF 20,000 from Entoria AG for the 2012 tax period. This amount is composed as follows:
In a letter dated January 15, 2017, Entoria AG informs the FTA that it accepts paragraphs 2 and 4 of the EM. However, it disputes the additional assessment and requests a challengeable decision in this regard.
During the dispute proceedings, the FTA determines that it made significant errors during the audit of Cardea GmbH. Instead of a supplementary assessment of CHF 1 million related to financial intermediary services, Cardea GmbH was charged only CHF 5,000. Cardea AG paid the CHF 5,000 without reservation. The only outstanding dispute now concerns the additional charges related to unaccounted subscription taxes and private shares.
In the objection proceedings, Cardea AG merely requests that the additional assessment related to the private shares be set aside. Regarding the acquisition tax, however, it makes no such request.
