Facts

Parties: A.A. (complainant) against the tax administration of the canton of Bern (respondent)

Courts: III. public law division of the Federal Supreme Court, tax appeal commission of the canton of Bern, administrative court of the canton of Bern

Date: August 19, 2024

Main question: Determination of the nullity of discretionary assessments due to serious procedural violations and obvious incorrectness

Facts:

  • The spouses A. returned to Switzerland in 2001 after years of work abroad and did not file tax returns.
  • The tax administration of the canton of Bern assessed them by discretion for the years 2005 to 2012.
  • The assessments were not challenged, and the tax administration partially enforced the claims by means of enforcement.
  • In 2012, the spouses A. applied for the revision of the assessments, which was partially granted.
  • In 2018, they applied for the determination of the nullity of the assessments for the years 2006 to 2009 and the refund of the "coercively collected" taxes.
  • The tax administration rejected the application, and the spouses A. challenged the decision.
  • The tax appeal commission and the administrative court of the canton of Bern dismissed the complaints.
  • The Federal Supreme Court quashed the judgment of the administrative court and determined the nullity of the assessments.

Considerations

The previous instance had determined the nullity of the revision decisions of the tax administration concerning the tax years 2010 to 2012. The Federal Supreme Court first examined whether the previous instance had rightly protected the determination of the lower instance. It found that the lower instance was not competent to decide on the tax years 2010 to 2012, as these were not part of the object of appeal. The lower instance was not required to examine the tax years 2010 to 2012 as a preliminary question, and the legal provisions did not provide for such competence. Therefore, the decision of the lower instance was null and void, and the previous instance should not have confirmed it.

Subsequently, the Federal Supreme Court examined whether the assessment decisions for the tax years 2006 to 2009 were null and void. It found that the assessment authority had increased the tax factors from year to year without sufficient justification, although there were indications that the estimates were too high. The assessment authority had obviously abused the discretionary assessment to punish the taxpayer for violating their cooperation obligations. This constituted a serious procedural violation, which, together with the obvious substantive incorrectness of the assessments,…