Facts
Parties and procedural history:
The complainants, spouses [A.A.] and [B.A.] , are shareholders of [B. AG] (AG). The Federal Tax Administration (FTA) levied withholding tax on monetary benefits from the AG to [A.A.] for the years 2017 and 2018, amounting to a total of CHF 204,319.-. The complainants applied to the tax office of the Canton of Aargau for a refund of the withholding tax paid in the amount of CHF 71,511.65. The tax office denied the refund with a decision dated 25 February 2021 on the grounds that the income had been intentionally undeclared. The objection filed against this was dismissed on 23 April 2021. The Special Administrative Court of the Canton of Aargau upheld these decisions with a judgment dated 22 September 2022. The complainants then filed a public-law appeal with the Federal Supreme Court.
Details of the facts:
The tax office discovered during an audit that amounts were credited to the private current account of complainant [A.A.] in the years 2017 and 2018 that were missing from the AG’s turnover. The invoices in question related to services that had been invoiced by the AG and received into its account. The tax office qualified these as hidden profit distributions to the complainant and included them in the AG’s taxable income. The complainants did not dispute that the amounts in question were to be qualified as monetary benefits, but argued that there had been no intentional non-declaration. They contended that the subjective fault issue had not been sufficiently proven and that a refund could not be excluded due to forfeiture.
Considerations
1. Admissibility of the appeal:
The Federal Supreme Court examines the public-law appeal for admissibility. It admits the appeal since the requirements under Art. 82 lit. a, Art. 83 e contrario, Art. 86 para. 1 lit. d and para. 2, Art. 89 para. 1, Art. 90 and Art. 100 para. 1 FSCA in conjunction with Art. 56 WTA are met. The complainants have complied with the formal and substantive requirements for the appeal. A complaint regarding the violation of the right to a hearing (Art. 29 para. 2 Cst.) was not examined further due to lack of qualified grounds.
2. Applicable law and scope of review:
The Federal Supreme Court takes the facts as established by the lower court (Art. 105 para. 1 FSCA). It examines the application of federal law ex officio with full cognition (Art. 95 lit. a, Art. 106 para. 1 FSCA). However, the complainants must raise the complaints they assert, unless the legal violation is obvious. The transitional provision of Art. 70d WTA applies, so that the amended version of Art. 23 para. 2 WTA is applicable to the present case.
3. Right to refund and forfeiture:
The complainants are generally entitled to a refund of the withholding tax, as they had their domicile in Switzerland at the time the taxable benefit fell due (Art. 22 para. 1 WTA). However, the right to refund is forfeited if the income was not declared contrary to legal provisions (Art. 23 para. 1 WTA). Forfeiture does not apply if the income was not declared negligently and is subsequently declared in a procedure that has not yet become final or is added by the tax authority on its own initiative (Art. 23 para. 2 lit. a and b WTA). Furthermore, forfeiture does not apply if no fault can be attributed to the person concerned.
4. Issue of fault and assessment of evidence:
The lower court found that complainant [A.A.] , as founder, sole shareholder, chairman of the board of directors and managing director of the AG, received the amounts in question as hidden profit…