Dismissal of the complaint against the Canton of Zurich and repeal of the tax assessment decision of the Canton of Obwalden

Facts

The spouses [X.] and [Y.] , both born in 1937, lived in a single-family home in Zurich and owned a vacation home in Toggenburg. After [X.] won the lottery in May 2006, [Y.] sold the vacation home and the spouses purchased a condominium in [V.] /OW. They deregistered from Zurich and registered in [V.] , but kept their single-family home in Zurich.

The spouses filed their tax return for the cantonal and municipal taxes as well as the direct federal tax 2006 in the Canton of Obwalden and paid the taxes. The tax office of the City of Zurich informed the tax administration of the Canton of Obwalden that [Y.] was subject to limited tax liability in the Canton of Zurich as of January 1, 2006, due to her real estate property in Zurich.

The spouses were taxed in Zurich for the state and municipal tax 2006 and paid the tax amount. They appealed against the unlimited tax liability in the Canton of Zurich, but it was rejected. The subsequent legal remedies were unsuccessful.

The spouses filed a complaint with the Federal Supreme Court due to intercantonal double taxation and requested that the decision of the Administrative Court of the Canton of Zurich be repealed and the tax sovereignty of the Canton of Zurich for the tax period 2006 be denied.

Considerations

The Federal Supreme Court examined the jurisdiction and admissibility of the complaint. It found that the complaint was admissible since it was directed against a final decision of a higher cantonal court.

The court pointed out that the prohibition of intercantonal double taxation (Art. 127 para. 3 Cst.) is violated if a taxpayer is taxed by two or more cantons for the same tax object and for the same period. It found that the spouses [X.] and [Y.] were taxed by both cantons Zurich and Obwalden for the tax period 2006.

The court examined the subjective tax liability of the spouses and found that the tax domicile of a natural person is present, in particular, if they stay there with the intention of permanent residence (Art. 3 para. 2 DFTA). It pointed out that the concept of tax domicile consists of an…