Facts
The Federal Tax Administration had retroactively registered [X.] , owner of a sole proprietorship, in the register of VAT-liable persons as of January 1, 1995. The subject of the proceedings were the VAT for the quarters 1st quarter 1995 to 4th quarter 1999. The Federal Tax Appeals Commission lifted the tax claims and found that [X.] had to pay VAT of CHF 7,537.45 with interest from the due date.
[X.] was a shareholder in various companies, including the limited partnerships [E.] & Co. and [F.] & Co. as well as the silent simple partnership '[G.] '. The Federal Tax Administration claimed that the services provided by [X.] were provided against payment and were therefore subject to VAT.
Considerations
The Federal Supreme Court had to decide whether the services provided by [X.] were to be qualified as taxable transactions. The appellant, the Federal Tax Administration, claimed that the services provided by [X.] were provided against payment and were therefore subject to VAT. The respondent, [X.] , argued that the services were to be qualified as shareholder contributions and were not subject to VAT.
The Federal Supreme Court stated that the question of whether shareholder contributions can trigger a taxable transaction requires fundamental considerations on the VAT treatment of partnerships and their members. It found that the…