Swiss Federal Supreme Court, 19.03.2026, 9C_157/2025
Facts
A married couple (born in 1943 and 1951), long-term residents of their family home in W.________ (Canton of Zurich), purchased a new house in U.________ (Canton of Zug) in 2017. The husband, founder of a corporate group, retained his positions as Chairman of the Board for several companies, the majority of which are based in the Canton of Zug.
In November 2017, the couple claimed to have relocated their residence from Zurich to Zug, completing official departure and registration procedures in December 2017. However, they retained full ownership and use of their Zurich home, claiming it was used as a secondary residence.
Following this change, the tax authorities of both the Cantons of Zurich and Zug claimed jurisdiction to tax the couple for tax periods starting in 2017. Faced with this double taxation conflict, the taxpayers petitioned the Federal Tax Administration (FTA) to determine the competent canton for direct federal tax purposes. The FTA, and subsequently the Federal Administrative Court on appeal, concluded that the couple's tax domicile remained in the Canton of Zurich for the 2017 to 2020 periods. The taxpayers appealed this decision to the Federal Supreme Court.
Legal Analysis
The Federal Supreme Court reiterated the principles governing the determination of tax domicile. According toArt. 3 para. 1 and 2 of the Federal Direct Tax Act (FDTA), a natural person is subject to tax in Switzerland based on personal affiliation when they have their tax domicile there, meaning they reside there with the intention of settling permanently.
This concept of tax domicile, derived fromArt. 23 para. 1 of the Swiss Civil Code, is not based on the taxpayer's internal intent, but on a set of objective facts recognizable by third parties. Tax domicile is located at the center of vital interests (Lebensmittelpunkt). When a person maintains ties to multiple locations, it must be determined where the closest relationships exist. The principle of a single tax domicile prevails.
Procedurally, although the principle of official investigation applies (authorities must establish facts ex officio), it is tempered by the taxpayer's duty to cooperate (Art. 126 para. 1 FDTA). A failure to fulfill this obligation may be interpreted as an indication against the taxpayer.
The Federal Supreme Court also clarified a recent evolution in its case law regarding the standard of proof. In tax matters, the standard of "preponderant probability" is now considered sufficient, replacing the requirement for strict proof (absolute certainty).
Finally, the right to be heard (which includes the right to the administration of evidence) may be limited. An authority may refuse to administer evidence (e.g., witness testimony) through an anticipatory assessment of evidence if it concludes, without arbitrariness, that such evidence would not alter its conviction already formed based on the elements in the file.
Application to the Case at Hand
The Federal Supreme Court examines whether the lower court correctly assessed the evidence in concluding that the tax domicile remained in the canton of Zurich. It conducts a detailed weighing of the interests and objective facts.
Several strong indicators support the maintenance of the domicile in Zurich:
- Retention of the family home: The Zurich house, comparable in size and amenities to the one in Zug, was kept fully furnished with the majority of personal belongings accumulated over the years. The insured value for the furniture there is more than double that of the Zug house.
- Spending habits: Analysis of bank statements shows that the vast majority of daily purchases and cash withdrawals were made in the Zurich region, not in Zug.
- Lack of cooperation: Despite repeated requests, the taxpayers failed to provide essential documents such as credit card statements, professional or personal calendars, or proof of a mail forwarding order. This refusal to cooperate is interpreted to their disadvantage.
- Energy consumption: The decrease in electricity consumption in Zurich is deemed too small to correspond to a mere secondary residence, suggesting a much more regular presence than alleged.
- Social and personal ties: The taxpayers' age and their long history in Zurich argue for deep roots that are difficult to sever. The continuation of social relationships in Zurich contradicts a transfer of the center of vital interests.
The indicators in favor of a domicile in Zug are considered weaker or inconclusive:
- Administrative steps: The official notification of the move is an indicator, but it is not decisive in the face of contrary objective facts.
- Real estate investments: Significant investments in the Zug house do not in themselves prove an actual presence.
- Professional ties: Although the spouse has professional activities in Zug, he provided no concrete details or proof of his actual presence (e.g., a calendar).
- Written testimonials: Statements from neighbors are deemed too general and pre-drafted. Those from the couple's daughters, while more personal and taken into account, are not sufficient to overcome the burden of objective evidence.
The Federal Supreme Court concludes that the overall assessment of the available objective evidence demonstrates, with a preponderance of probability, that the couple's center of vital interests remained in W.________ (ZH).
Regarding the complaint of a violation of the right to be heard, the Court finds that the lower instance could, without arbitrariness, decline to hear the daughters and neighbors. Given the strength of the documentary evidence and the taxpayers' lack of cooperation on other points, it was legitimate to consider that these hearings would not have altered the court's conviction.
Outcome
The Federal Supreme Court dismisses the taxpayers' appeal. It confirms that their tax domicile for the 2017 to 2020 periods is located in the canton of Zurich, which is therefore competent for the assessment of direct federal tax. Legal costs are charged to the appellants.
Silex tax newsletter published in collaboration with Anna Vladau, Attorney at Law
