Partial Approval of the Constitutional Complaint against Double Taxation of Insurance Benefits

Facts

The complainant, [A.] , is the daughter of [C.] , who died on April 1, 1996, and had his last domicile in the canton of Aargau. The heirs were his three children. On October 4, 1996, the "[X.] " life insurance company informed the Federal Tax Administration that the three descendants of the deceased had received a capital benefit of CHF 517,996 from the pension fund (second pillar) relationship.

The tax authority for commercial enterprises and liberal professions of the canton of Lucerne levied a special tax on [A.] on September 1, 1997, for the year 1996, on her share of CHF 172,665. This assessment was not contested by the taxpayer. However, the cantonal tax administration of Lucerne filed an appeal against the assessment of September 1, 1997, on December 3, 1998.

The tax office of the canton of Aargau notified [A.] on January 20, 1998, of the assessment of inheritance tax, based on an inheritance tax net assets, which also included direct claims of the heirs from life, savings, risk, and survivor's insurance. The assessment became final.

The tax authority of Lucerne learned of further capital benefits on March 23, 1998, and issued a new special assessment for 1996 on May 7, 1998, which was intended to supplement the ruling of September 1, 1997. [A.] filed an appeal against this ruling on May 19, 1998.

The Administrative Court of the canton of Lucerne dismissed the complaint on December 3, 2001. [A.] filed a constitutional complaint with the Federal Supreme Court on January 7, 2002, and requested that it be determined that there was an unconstitutional double taxation.

Considerations

The Federal Supreme Court examined whether the canton of Lucerne had forfeited its right to taxation. It concluded that the canton of Lucerne had not waited unreasonably long to assert its tax claim and that the complainant had not been disadvantaged by the subsequent assertion of the tax claim.

The Federal Supreme Court further examined whether there was a double taxation that violated Article 127(3) of the Cst. or Article 46(2) of the fCst. It concluded that the capital benefits from insurance that are subject to either income tax or inheritance tax in two or more cantons according to their internal law constitute an inadmissible (current) double taxation.

The Federal Supreme Court reviewed the conflict-of-laws allocation of pension and insurance…