Facts
The [A. AG] , a general contractor in the construction industry, had its registered office in [U.] /SZ during the tax periods 2001-2007. The sole shareholder [B.] (born 1976) was president of the board of directors and later the sole member of the board of directors with sole signature authority. The tax administration of the canton of Schwyz (KSTV/SZ) and the administration for direct federal tax of the canton of Schwyz (VdBSt/SZ) carried out the assessments based on the submitted commercial financial statements.
In 2008, a special criminal investigation was launched against the company and the sole shareholder on suspicion of serious tax offenses. The tax authority initiated a supplementary tax procedure and a tax penalty procedure for tax evasion. The company and the sole shareholder lodged an appeal, which was partially upheld.
The Administrative Court of the canton of Schwyz partially upheld the appeals and overturned the appeal decisions. The company and the tax authority appealed to the Federal Court.
Considerations
The Federal Court examined the formal and factual objections of the company and came to the conclusion that the cantonal authorities had considered the tax provision (supplementary tax) only as a reduction of capital, but not as a reduction of profit, which was contrary to federal law.
The Federal Court discussed the statute of limitations for prosecution in cases of completed tax evasion and came to the conclusion that the statute of limitations had expired with regard to the tax periods 2001-2004. However, the statute of…