Facts
The appellant, a Swiss national, resided in France and exercised a dependent gainful activity in Switzerland. He was subject to withholding tax and was unable to deduct all the expenses he would have been able to deduct under an ordinary tax regime.
The cantonal tax authorities and the Appeals Commission rejected his requests for additional deductions for the years 2004, 2005, and 2006.
The appellant appealed to the Federal Court, which admitted his appeal and remanded the case for a new decision.
Considerations
The Agreement of June 21, 1999, between the Swiss Confederation and the European Community on the free movement of persons prohibits any discrimination based on nationality.
The appellant, a Swiss national, can invoke this prohibition of discrimination against his own national state, as he is in a situation comparable to that of any other subject invoking the benefit of the rights and freedoms guaranteed by the Agreement.
Community case law in the field of direct taxation considers that national law provisions must be considered as indirectly discriminatory if they are likely to affect nationals of other Member States more than nationals.
The Federal Court found that the regime of lump-sum deductions in withholding tax violates the non-discrimination principle provided for in Articles 2 AFMP and 9(2) Annex I AFMP.
It…