Facts

The [A. AG] , a law firm managed by its shareholders, was registered as an employer with the Compensation Fund Lucerne. The shareholders [B.] , [C.] , [D.] and [E.] were also employed by the company and each held 25 % of the shares until summer 2021. An employer audit revealed that during the audit period from 1 January 2015 to 31 December 2019, the company paid varying amounts to the shareholder employees from the "operating profit" of the previous year, described as "asymmetric dividends". The Compensation Fund qualified these benefits as (contribution-liable) remuneration in kind from the employment relationship and, by decision of 6 July 2020 and appeal decision of 18 January 2021, required the company to pay social security contributions (including administrative costs) totalling CHF 215,523.50 as well as accrued interest of CHF 23,563.80.

After a remittal by the Lucerne Cantonal Court (judgment of 4 April 2022, 5V 21 79), a new appeal decision of the Compensation Fund was issued on 21 March 2023, again requiring the company to make back payments. The Lucerne Cantonal Court partially upheld the complaint against this with a judgment of 25 March 2024 (5V 23 150). It qualified parts of the benefits (CHF 14,424.30 for 2015, CHF 39,135.20 for 2016, CHF 57,106.40 for 2017, CHF 2,500 for 2018 and CHF 2,500 for 2019) as dividends and the remainder as (contribution-liable) "determinant salary". The matter was remitted to the Compensation Fund for reassessment.

The [A. AG] filed a public-law appeal and requested the annulment of the lower court judgments and the contested decisions and appeal decisions. It argued that no back payment obligation existed, as the benefits had been correctly qualified as dividends.

Considerations

The Federal Supreme Court first examined its jurisdiction and the admissibility requirements. It found that the appeal against the judgment of the Lucerne Cantonal Court of 25 March 2024 (5V 23 150) was admissible, as it was a final decision concluding the proceedings. Furthermore, the earlier remittal judgment of 4 April 2022 (5V 21 79) was also contestable insofar as it had an impact on the later judgment. The appellant had a legitimate interest in the annulment of the obligation to pay social security contributions, while a declaratory interest regarding the contribution liability had not been sufficiently demonstrated.

On the merits, the Federal Supreme Court examined the qualification of the benefits as salary CO dividend pursuant to Art. 4 and 5 OASIA and the relevant case law. According to this, social security contributions are only due on earned income, not on investment income (dividends). Whether a benefit is to be qualified as salary CO dividend is determined by its nature and function. The decisive factor is whether the benefit is justified primarily by the employment relationship CO by the shareholding. Benefits that are not based on the employment relationship but on the shareholder status are to be treated as dividends and are thus contribution-free.

The Federal Supreme Court confirmed the lower court's view that part of the "asymmetric dividends" were to be qualified as salary, as they were primarily attributable to the individual work performance of the shareholders (in particular the acquisition of mandates and revenue generation). The lower court had correctly examined whether the…