Facts
The appellant, a fiduciary company, acquired a property in V. in 2012 and carried out extensive renovations in 2013. Since October 2013, the main shareholder of the company has used the property exclusively for his private purposes and paid rent for it. The appellant claimed the deduction of the input taxes paid on the renovations.
The Federal Tax Administration (FTA) refused the input tax deduction, citing tax avoidance. The Federal Administrative Court partially upheld the appeal and remanded the matter regarding the input tax amount of CHF 729.-- to the FTA. It dismissed the appeal in all other respects.
Considerations
The Federal Supreme Court examined whether the requirements for tax avoidance were met. For this, three criteria must be cumulatively fulfilled:
(1) The chosen legal structure must appear unusual, inappropriate, or peculiar and be completely unsuitable to the economic circumstances.
(2) It must be assumed that the legal structure was abusively chosen solely for the purpose of tax savings.
(3) The procedure…