The Federal Court upheld the appeal by the FTA against a Federal Administrative Court judgement. The honey and flower small retailer was found liable to pay the FTA an additional tax amounting to CHF 731.35. In contrast to the Federal Administrative Court the Federal Court was not convinced by the taxpayer’s (sweet) argumentation.
Specifically the question revolved around the fact that in the vouchers, which he issued to his customers, the retailer reported the prices “including 8% VAT”. But with the FTA he reported correctly at the reduced rate of only 2.5% (or in this case at the net tax rate of 0.6%). On the principle that “tax invoiced = tax payable” the FTA made a subsequent charge of the difference between the reduced rate and the normal rate. The Federal Administrative Court concluded that the taxpayer had successfully proved that, despite quoting the higher tax rate, the Confederation had suffered no loss and therefore upheld his appeal.
However the Federal Court was unable to accept this argumentation. Based on Art. 27 Para. 4 VAT Law the tax is not payable “if the taxpayer proves that the Confederation has not suffered a loss of tax”. The Federal Court adopts a very narrow interpretation and relies solely on the wording of the law. One can therefore not rely only on the circumstances at the moment of invoicing. “It is also conceivable that the tax voucher is passed on abusively to a taxable person” in the words of the Federal Court. With such an interpretation it becomes impossible for the taxpayer to produce proof that the Confederation has suffered no loss of tax. But – contrary to the comments of the Federal Court – this does not comply with previous practice. As long as Art. 45a of the old VAT Ordinance applied, proof was not necessary, if no loss of tax was obvious, which is always the case, if the supplies in question have been rendered to private persons.
It is clear from this judgement that in interpreting the law reliance must be placed primarily on its wording. It is to be hoped that, in a procedure with a positive outcome for the taxpayer, the Federal Court also remembers this.