Withholding Tax Liability in the Event of De Facto Liquidation of a Stock Corporation

Facts

The appellant [X.] was the sole member of the board of directors of [A. AG] . The company had sold its assets and distributed the proceeds instead of reinvesting them. The Federal Tax Administration (FTA) requested the appellant to submit the annual accounts and form 103, otherwise a tax assessment would be made at its discretion. The appellant failed to comply with this request, and the FTA levied a withholding tax of CHF 278,425.--. The appellant lodged an objection, which was partially upheld, and the withholding tax was reduced to CHF 269,728.--.

The appellant filed a complaint in public law matters with a request to set aside the judgment of the Federal Administrative Court and to remand the case to the lower court. He denied a de facto liquidation and challenged the calculation of the liquidation surplus.

Considerations

The Federal Court examined the complaint and came to the conclusion that the Federal Tax Administration had rightly levied a withholding tax of CHF 269,728.--. The court found that [A. AG] had carried out a de facto liquidation by selling its assets and not reinvesting the proceeds.

The court also rejected the appellant's objection that the Federal Tax Administration had already initiated debt collection proceedings. It found that the complaint to the…