Facts
The [A. GmbH] , with its statutory seat in [U.] /SZ, was assessed for cantonal and municipal taxes as well as for direct federal tax by the tax administration of the Canton of Schwyz for the tax periods 2016 to 2018. These assessments were accepted by the company without challenge and have become final.
In a letter dated 6 November 2020, the Cantonal Tax Office of St. Gallen informed the company that, based on its findings, actual management appeared to be exercised from the Canton of St. Gallen. After investigations, the tax office issued a ruling on 15 February 2021 determining that the [A. GmbH] had been unlimitedly taxable in the Canton of St. Gallen as of 1 January 2016 at the seat of its actual management in [V.] (municipality of [W.] ) /SG. The company unsuccessfully filed an objection before its cantonal legal remedies were dismissed by the decision on appeal of the Cantonal Appeals Commission on 25 April 2022 and the judgment of the Administrative Court on 22 September 2022.
On 24 October 2022, the [A. GmbH] filed an appeal in public law matters with the Federal Supreme Court. It requested that the administrative court judgment be set aside and that it be determined that the Canton of St. Gallen has no tax jurisdiction over the appellant. In the alternative, it requested that the assessment rulings of the Canton of Schwyz regarding cantonal and municipal taxes as well as direct federal tax for the tax periods 2016 to 2018 be set aside and that the Canton of Schwyz be ordered to refund the tax amounts already paid for these tax periods. In a further alternative, it requested that the matter be remitted to the St. Gallen Administrative Court for reassessment.
The tax office and the Administrative Court of the Canton of St. Gallen as well as the tax administration of the Canton of Schwyz and the Federal Tax Administration requested that the appeal be dismissed, with the Canton of Schwyz in particular arguing that the right to appeal had been forfeited.
Considerations
The Federal Supreme Court first examines the admissibility of the appeal. The appeal was filed in a timely and proper manner and is directed against a final decision of a last cantonal instance. The appellant is entitled to appeal as a taxpayer pursuant to Art. 73 para. 2 DTHA. Moreover, in cases of inter-cantonal double taxation, an already final assessment by another canton may also be challenged, since the appeals procedure only needs to be exhausted in one canton. The assessment rulings of the Canton of Schwyz are therefore also challenged in the present case.
The appeal challenges the determination of the tax jurisdiction of the Canton of St. Gallen as of the 2016 tax period. Legal entities are taxable due to personal affiliation if their seat CO actual management is located in Switzerland CO in the canton. In the event of a discrepancy between the statutory seat and actual management, the conflict must be resolved in accordance with the principles of federal law on the prohibition of inter-cantonal double taxation. The decisive factor is the place where the threads of management converge and the key corporate decisions are made. A statutory seat does not qualify as the principal tax domicile if it has merely formal significance and does not correspond to the actual circumstances.
The Administrative Court confirmed the tax jurisdiction of the Canton of St. Gallen based on indications of a concentration of business activity at the residence of the managing shareholder in [V.] (municipality of [W.] ) /SG. At the seat in [U.] /SZ, there was merely a letterbox domicile without its own infrastructure CO staff. The actual management of the company was exercised by the sole permanently employed managing shareholder [C.] , whose residence is in [V.] (municipality of [W.] ) /SG. In doing so, the lower court took into account the burden of proof:…