Facts

The appellants, a married couple domiciled in the canton of Geneva, were assessed for the tax years 2007 to 2015 by the Geneva Cantonal Tax Administration (hereinafter: the Cantonal Tax Administration). The assessments for the direct federal tax (DFT) and the cantonal and communal taxes (CCT) became final.

On 18 September 2017, the Cantonal Tax Administration opened recovery and tax evasion proceedings for the years 2007 to 2015, on the ground that the taxpayers had not declared a claim against the company [C.] (hereinafter: the company), arising from an amount received from their pension fund and lent to that company.

On 16 February 2018, the Cantonal Tax Administration issued CCT recovery notices for the years 2007 to 2010 and 2012 to 2014, totalling CHF 32,756.85, and fine notices for CCT tax evasion for the years 2008 to 2010 and 2012 to 2014, totalling CHF 21,959. The undeclared elements did not give rise to any supplementary DFT.

The taxpayers filed an objection on 22 February 2018, which was dismissed on 7 May 2018. Their appeal to the Geneva Administrative Court of First Instance was dismissed on 12 November 2018, and their appeal to the Administrative Chamber of the Geneva Court of Justice (hereinafter: the Court of Justice) was dismissed on 22 January 2019 (ATA/74/2019).

By submission of 29 January 2019, one of the taxpayers (the appellant) lodged an appeal with the Federal Supreme Court, requesting that he be granted judgment in his favour. The Court of Justice deferred to the court's discretion, and the Cantonal Tax Administration requested dismissal.

Subject matter of the dispute: CCT recovery (periods 2007 to 2010 and 2012 to 2014) and fine for CCT tax evasion (periods 2008 to 2010 and 2012 to 2014).

Key points:

  • Admissibility of the public law appeal and statutory presumption of representation of spouses;
  • New facts and new evidence (recoverability of the claim, waiver of the claim of January 2018) inadmissible;
  • Conditions for tax recovery and inclusion of the claim in taxable wealth;
  • Debt deductions not sufficiently established;
  • Offence of tax evasion and amount of the fine set at 0.75 times the amount evaded.

Considerations

As to admissibility, the Federal Supreme Court holds that the CCT recovery and the fine for tax evasion fall within public law (art. 82 let. a FSCA), that no exception under art. 83 FSCA applies, and that the public law appeal is open (art. 73 para. 1 DTHA). The absence of a title for the appeal does not prejudice the appellant since the appeal meets the formal requirements of the available remedy (ATF 138 I 367 consid. 1.1). The reasoning may be questioned in light of art. 42 para. 2 FSCA, but the question may remain open since the appeal is unfounded. The non-signing spouse is also a party to the proceedings by virtue of the statutory presumption of representation (art. 3 para. 3 and 40 DTHA; art. 16 LPFisc).

As to the facts, the Federal Supreme Court recalls that it rules on the basis of the facts established by the lower authority (art. 105 para. 1 FSCA) and that facts invoked in an appellate manner are inadmissible; the appellant must show how the findings would be arbitrary (art. 97 para. 1 and 106 para. 2 FSCA). The allegations that the claim is unrecoverable due to the company's difficulties, as well as the document entitled 'Waiver of claim' of January 2018, are new and cannot be taken into consideration (art. 99 para. 1 FSCA), their absence from the proceedings before the lower authorities not being justified.

As to the tax recovery, it is not disputed that the conditions of art. 53 para. 1 DTHA and art. 59 para. 1 LPFisc were met, the taxpayers acknowledging that they did not declare the wealth element in question. The claim against the company forms part of taxable wealth (art. 47 let. e LIPP; art. 2 let. e…