Facts
The opposing party A.A. concluded an employment contract with a football club domiciled in the United Arab Emirates (UAE) on November 5, 2011. On July 9, 2013, A.A. and the football club terminated the contract prematurely, with the football club having to pay A.A. a total compensation of EUR 2,345,000 in installments.
The Tax Administration of the Canton of Basel-Landschaft added the payments from the football club totaling CHF 1,813,412 to the taxable income. However, the Cantonal Court of Basel-Landschaft overturned these assessments, as A.A. had already acquired the compensation at the time of signing the contract termination agreement.
The Tax Administration of the Canton of Basel-Landschaft and the Federal Tax Administration (FTA) appealed the judgments of the Cantonal Court to the Federal Supreme Court.
Considerations
The Federal Supreme Court confirmed the judgments of the Cantonal Tax Court. It concluded that A.A. had only acquired the disputed installments at the time of their due date and payment in 2017. Since A.A. was resident in Switzerland at that time, the payments were subject to direct federal tax.
Furthermore, the Federal Supreme Court examined whether the United Arab Emirates had a right to tax the compensation based on the Double…