Swiss Federal Supreme Court, 03.02.2026, 9C_653/2025
Facts
Following an automatic exchange of information, the Geneva tax authorities discovered that a married couple held undeclared life insurance policies with a foreign company. The authorities initiated tax reassessment and tax evasion proceedings, imposing fines for the 2014 to 2018 tax periods. Upon appeal, the administration acknowledged that the taxpayers had acted out of negligence and reduced the fines to 0.5 times the amount of the evaded tax. The cantonal courts upheld this decision, noting that given their professional backgrounds (a lawyer and a bank employee), the taxpayers could not rely solely on information from foreign bank managers regarding the tax treatment of these assets in Switzerland. They should have sought information from reliable sources. The taxpayers appealed to the Federal Supreme Court, requesting the cancellation of the fines.
Legal Analysis
The dispute concerns the classification of tax evasion by negligence (Art. 56 para. 1 of the Federal Act on Direct Federal Tax (LHID)). Such an offense occurs when a taxpayer, through conduct contrary to their duty of care, causes an incomplete tax assessment. In their defense, the taxpayers invoked a mistake of fact (Art. 13 of the Swiss Criminal Code) and a mistake of law (Art. 21 of the Swiss Criminal Code). A mistake of law is only excusable if it was unavoidable. The existence of a mistake (what the perpetrator believed, knew, or intended) is a question of fact that binds the Federal Supreme Court, unless the facts were established in a manifestly inaccurate manner. The Federal Supreme Court does not consider arguments that are merely appellate in nature.
Application to the Case
The Federal Supreme Court rejected the appellants' arguments. It reiterated that the assessment of whether a mistake occurred is a matter of fact determined by the lower court. The appellants merely asserted that the conditions for a mistake of fact or law were met, without demonstrating how the Court of Justice's assessment was arbitrary. The Federal Supreme Court upheld the cantonal authority's analysis: given their knowledge and professional experience, the taxpayers were aware of tax matters. They could not have been unaware that a foreign bank manager was not a qualified source for information on Swiss tax law. By failing to consult either the tax authorities or a specialist, they breached their duty of care and therefore acted negligently. The invoked mistake was not unavoidable. Tax evasion by negligence is therefore established.
Outcome
The Federal Supreme Court dismissed the appeal to the extent that it was admissible. It upheld the fines for tax evasion by negligence for the 2014 to 2018 tax periods and ordered the appellants to pay the legal costs.
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