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Facts

The [A. AG] , successor in law to [B. AG] , requested a refund of withholding tax in the amount of CHF 18,341,323.90 regarding dividend gross income of CHF 52,403,782.60 from 2006. The Federal Tax Administration (FTA) denied the refund by decision of September 6, 2010, as the applicant did not have the right to use the shares that generated the dividends and tax evasion was present.

After an unsuccessful appeal, [A. AG] appealed to the Federal Administrative Court, which dismissed its appeal by judgment of March 13, 2013. [A. AG] filed a complaint with the Federal Supreme Court in public law matters and requested the annulment of the Federal Administrative Court's judgment and the refund of the withholding tax.

1. Admissibility of the Appeal

The appeal in public law matters is admissible, as it concerns a final decision of the Federal Administrative Court in a matter of public law and there are no grounds for exclusion. The appellant is entitled to appeal.

2. Right to Use

The Federal Supreme Court has dealt with the concept of "right to use\" within the meaning of Art. 21 para. 1 lit. a WTA. This right includes not only ownership of the asset but also the claim to the income generated by the asset. A legal entity is entitled to a refund of withholding tax if, at the time the taxable payment became due, it had its seat in Switzerland, properly recorded the income subject to withholding tax as income, and at the time the taxable payment became due, had the right to use the asset that generated the taxable income.

3. Assessment of the Transactions

The Federal Administrative Court assessed the appellant's transactions as an economic unit and found that the appellant was merely interposed to receive the dividends. The transactions were aimed at obtaining a full refund of Swiss withholding tax. The appellant had to pass on the majority of the dividends it received to its foreign counterparties.

4. Effective Right to Use

The Federal Supreme Court found that the appellant did not have the effective right to use, as it did not retain the dividends for itself but instead passed them on to its counterparties. The appellant was merely interposed to receive the dividends in order to obtain…