Facts
Swiss International Air Lines AG has its registered office in Basel and maintains branch offices in Le Grand-Saconnex/GE and Kloten/ZH. It operates an international aviation company and maintains business establishments in various countries for this purpose.
The Tax Office of the Canton of Zurich made various adjustments for the 2011 tax period, including with regard to the royalties paid by the taxpayer to its subsidiaries and the foreign quota. The taxpayer filed an objection, which was partially upheld.
Both the Tax Office of the Canton of Zurich and Swiss International Air Lines AG have filed an appeal in public law matters with the Federal Supreme Court.
Considerations
The Federal Supreme Court fully upholds the appeal of the Tax Office of the Canton of Zurich, and partially upholds that of Swiss International Air Lines AG.
Regarding the direct federal tax, the Federal Supreme Court makes the following findings:
- The jurisdiction for the assessment of direct federal tax lies with the canton in which the legal entity has its registered office or place of effective management at the end of the tax period or tax liability. In the present case, the Tax Office of the Canton of Zurich was responsible.
- The profits earned by the taxpayer from the operation of aircraft in international traffic, from directly related activities, and from auxiliary activities, are to be delimited according to the object-related method. They remain subject to direct federal tax.
Regarding the cantonal and municipal taxes, the Federal Supreme Court states
- The tax liability of personally affiliated legal entities is to be delimited analogously to the regulation of federal law in accordance with the…