Facts
The complainants, [A.] and [B.] , are spouses who lodged a complaint against the decision of the Administrative Court of the Canton of Zurich of 3 July 2002. This decision concerned the taxation of a dividend that [A.] had received from [C. AG] in 1998. The Administrative Court had decided that this dividend was to be taxed as extraordinary income.
[C. AG] had distributed dividends totaling CHF 2,375,000 for the first time in September 1998, of which CHF 1,275,000 went to [A.] . This dividend was financed from the profit of the previous financial year 1997/98.
The Tax Office of the Canton of Zurich had assessed the dividend received by [A.] as extraordinary income and subjected it to a separate annual tax. The complainants appealed against this, but the Administrative Court dismissed the appeal.
The complainants then lodged a constitutional complaint and an administrative court appeal with the Federal Court, requesting that the decision of the Administrative Court be set aside and that it be established that the disputed dividend was not subject to annual tax.
Considerations
The Federal Court first examined whether the constitutional complaint or the administrative court appeal was admissible. It came to the conclusion that the administrative court appeal was admissible, as it concerned the application of Art. 69 of the Tax Harmonization Act (DTHA), which governs the change in temporal assessment.
The Federal Court pointed out that Art. 69 DTHA is a mandatory federal law provision that leaves the cantons no scope to deviate from the requirements. The regulation of the Government Council of the Canton of Zurich was therefore to be regarded as a mere implementing regulation that implements the mandatory federal law requirements.
The Federal Court also examined whether the taxation of extraordinary income…