Facts
The [X. AG] , a company based in [U.] /ZH, active in the field of telecommunications services, was held by a company based in Germany. The taxpayer declared a taxable profit of CHF 102,475.-- and CHF 51,271.-- in the tax returns for 2010/2011 and 2011/2012, respectively. The Tax Office of the Canton of Zurich (KStA/ZH) conducted a book examination on June 3, 2014, and requested the taxpayer to submit additional documents. The taxpayer complied with the request, but the submitted documents were found to be insufficient. The KStA/ZH proceeded with the assessment according to discretionary judgment and set the taxable profit for both tax periods at CHF 1 million each.
The taxpayer filed an objection against the assessment decisions and stated that due to a tax audit at the parent company in Germany and related adjustments to internal accounting, the requested documents could not be submitted completely. The taxpayer announced that the necessary adjustments would be made by July 31, 2015, and the correct documents would be submitted.
The KStA/ZH did not consider the objection because the requested documents had not been submitted even within the objection period. The taxpayer filed an appeal with the Federal Court and requested that the contested decision be revoked and the case be referred back to the KStA/ZH for continuation of the objection procedure.
Considerations
The Federal Court examined whether the statutory requirements for an objection against an assessment according to discretionary judgment were met. The taxpayer had announced in the objection that the requested documents would be submitted by July 31, 2015, but at the time of the expiration of the objection period, the KStA/ZH had nothing more than this declaration of intent.
The Federal Court found that the objection of June 18, 2015, did not contain a quantified request and lacked sufficient reasoning, which is explicitly provided for by law and constitutes a prerequisite…