Tax & Legal

The German and Swiss tax authorities have concluded a new consultation agreement regarding the group of persons to whom Article 15 paragraph 4 applies to ensure the uniform application and interpretation of Article 15 paragraph 4 of the double tax agreement between Germany and Switzerland (Federal Ministry of Finance, letter dated 25 April 2023).

The Supreme Tax Court has held that compensation for loss of office is taxable in the state of residence under the German/Swiss tax treaty and not in the state of employment. A mutual agreement between the two revenue authorities to the contrary is not to be applied for lack of an adequate legal basis.

The Supreme Tax Court has held that the costs incurred by a taxpayer in connection with a tax treaty mutual agreement proceeding are not costs of earning the relevant income, but has left open a possible deduction as “unusual expenses”.