Federal Supreme Court, 03.25.2026, 2C_174/2026
Facts
On March 6, 2024, the Italian tax authority (Comando generale della Guardia di Finanza) submitted a request for administrative assistance to the Federal Tax Administration (FTA). Based on the Double Taxation Convention between Switzerland and Italy (DTC CH-IT), this request was made in the context of a tax audit of company A.________ for the years 2020 to 2022.
The Italian investigation focused on the deductibility of expenses related to purchases of goods by A.________ from its Swiss parent company, B.________ Sàrl. The relevance of these deductions was examined in light of recent changes in Swiss tax law, notably the abandonment of the practice of tax apportionment for principal companies and the introduction ofArt. 61a of the Federal Direct Tax Act (FDTA).
On April 30, 2025, the FTA issued a final decision in favor of transmitting the information. Companies A.________ and B.________ Sàrl appealed this decision to the Federal Administrative Court (FAC), specifically opposing the transmission of a document titled "Allegato 7," a tax ruling. They argued that this document exceeded the scope of the assistance request.
In its judgment of March 5, 2026, the FAC partially upheld the appeal. It rejected the companies' main argument and authorized the transmission of "Allegato 7," but ordered the FTA to explicitly draw the Italian authority's attention to the strict confidentiality obligations and limitations on the use of the transmitted information, in accordance withArt. 27 para. 2 of the Switzerland–Italy Double Taxation Convention.
Dissatisfied, both companies appealed to the Federal Supreme Court, requesting the annulment of the FAC judgment insofar as it authorized the transmission of "Allegato 7" and requesting that information relating to the "step-up" for cantonal and municipal taxes be redacted (blacked out).
Legal Analysis
The Federal Supreme Court reiterates the conditions for the admissibility of an appeal in matters of international administrative tax assistance. According toArt. 83 let. h of the Federal Supreme Court Act (FSCA), such an appeal is in principle inadmissible.Art. 84a FSCA provides an exception if the appeal raises a legal question of principle or if it concerns a particularly important case. It is the responsibility of the appellant to demonstrate in detail that one of these conditions is met. A legal question of principle exists when a new and controversial issue must be decided, the clarification of which is necessary for the application and development of the law, or when the decision is likely to guide the practice of lower authorities.
Regarding the interpretation of a request for assistance, the Federal Supreme Court reiterates its established case law. Such a request must be interpreted according to the principle of good faith (Art. 26 of the Vienna Convention on the Law of Treaties), in light of the purpose pursued by the requesting authority. The objective is to ensure an effective exchange of information, in accordance with the object and purpose of the applicable convention. In the event of ambiguity, the interpretation that favors the effectiveness of the treaty must be prioritized.
Application to the specific case
The appellants argued that their case raised a legal question of principle, namely the scope of the interpretation of the request for assistance. According to them, the Italian request exclusively targeted the "step-up" mechanism within the meaning of Art. 61a LIFD (Direct Federal Tax) and not the one applicable to cantonal and municipal taxes. The transmission of information relating to the latter taxes would therefore exceed the scope of the request.
The Federal Supreme Court rejects this argument. It notes that the disputed issue does not concern a new legal principle, but rather the application of well-established principles of interpretation to a specific case. The Federal Administrative Court interpreted the request to determine whether it also encompassed the cantonal and municipal aspects of the "step-up," and concluded in the affirmative.
The Federal Supreme Court considers that the appellants are merely challenging the Federal Administrative Court's concrete assessment, without demonstrating how this would constitute a legal question of principle requiring the intervention of the highest judicial authority. The case law on how to interpret requests for assistance is clear and consistent. It allows for the transmission of information that is not explicitly mentioned but has a close connection to the subject of the request.
Consequently, the Federal Supreme Court concludes that the condition of the existence of a legal question of principle, required by Art. 84a LTF, is not met.
Outcome
The public law appeal is declared inadmissible. The court costs, set at CHF 5,000, are to be borne jointly and severally by the appellants. No legal costs are awarded. The decision of the Federal Administrative Court is therefore upheld.
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