Facts
Pension Fund A.A. is a Swiss foundation that has invested funds in American Common Trust Funds (CTFs), establishing revocable and discretionary grantor trusts as the settlor, with Bank E. as the trustee. The Federal Tax Administration initially confirmed in a 2003 ruling that this investment structure was not subject to Swiss securities transfer stamp duty. However, in 2011, it revoked this ruling with retroactive effect to July 1, 2007, and imposed stamp duty owed by the Pension Fund for investments made in the CTFs between the 3rd quarter of 2007 and the 4th quarter of 2010.
The Pension Fund appealed this decision to the Federal Administrative Court, which upheld the appeal and annulled the decision of the Federal Tax Administration. The Federal Tax Administration then appealed to the Federal Supreme Court.
Considerations
The Federal Supreme Court dismissed the appeal of the Federal Tax Administration. It considered that federal stamp duties have a formal character, so that the legal form of the transaction is decisive, not its economic purpose. Thus, the notion of ownership referred to in Art. 13 para. 1 of the Stamp Duty Act corresponds to the formal ownership under civil law, without taking into account the economic control of the assets.
The Federal Supreme Court then examined the recognition under Swiss private law of the American trust established by the Pension Fund. Based on the Hague Convention of July 1, 1985 on the Law Applicable to Trusts and on their Recognition, it found…