Facts
This case concerned the taxation of a married couple living in an undivided household, but only one of the two partners generated taxable income at the secondary tax domicile. The St. Gallen Cantonal Tax Office wanted to tax both spouses jointly, while the cantonal appeal instances favored separate individual taxation of the spouses.
The deceased husband did not generate any taxable income in the Canton of St. Gallen, while his wife sold a property there. Since the married couple was subject to household taxation at the primary tax domicile, the Cantonal Tax Office took the view that a joint tax liability of the spouses at the secondary tax domicile was appropriate, even if only one of the two partners had economic ties there.
Considerations
The Federal Supreme Court upheld the appeal of the St. Gallen Cantonal Tax Office and adhered to its previous case law, according to which the income and assets of spouses living in a legally and factually undivided marriage are added together (so-called factor addition).
The Federal Supreme Court argued that the taxation of the married couple as a unit affects not only the tax base, but also the tax liability. Thus, household taxation can establish the tax liability of both spouses in a canton, even if only one spouse generates taxable income or has assets in that canton.
The lower…