Facts
Spouses A.A. and B.A. are domiciled in U./ZH. The husband is the owner of D. AG, and the wife is the owner of condominium property (office premises, archive/storage, parking spaces) which she holds in her private assets and rents to D. AG for CHF 50,000 per year. D. AG maintains sublease agreements with third parties, resulting in sublease rents of CHF 155,000 per year. The authorities of the Canton of Zurich calculated the difference of CHF 105,000 at the level of the wife/landlord. The Federal Court dismisses the appeal of the spouses, albeit with a different reasoning than the lower instance.Considerations
The Federal Court concludes that the chosen legal structure constitutes tax evasion. While the mere underpriced rental to the company does not constitute tax evasion, the decisive factor is that the contractual conditions enabled the company to generate a net cash flow of around CHF 105,000 in the 2011/2012 fiscal year. This allowed the spouses to convert taxable rents into tax-free amortization. The legal…