Irrevocable discretionary Trust: Administrative Assistance in Tax Matters granted
Ruling of the Federal Supreme Court of 28 December 2021 (2C_936/2020)
In the present case, the Indian MoF is requesting administrative assistance with regard a natural person who is a "beneficiary" of a trust for which a company (ULC) holds an account with a Swiss bank. The legal question that has been disputed and must be clarified in this context is whether and to what extent bank information relating to this account (of the ULC) can be expected to be considered "relevant". The lower court took the view that beneficiaries of an irrevocable discretionary trust are only entitled to distributions. The complainant took the same position and concluded that bank information from a bank account held in such a trust is not likely to be relevant in administrative assistance proceedings against the beneficiary. The Federal Supreme Court ruled that Indian law was applicable to the question of the tax treatment of the trust and that it was not up to the Swiss authorities to examine whether an "irrevocable discretionary trust" existed and it was not for the FTA to deal with the case law of the Indian Supreme Court, even if, as the complainant argued, it ruled that irrevocable discretionary trusts are not to be imputed to the beneficiaries. It must, therefore, be assumed that all documents edited by Bank B. AG are likely to be relevant. Dismissal of the appeal.
The Federal Supreme Court grants administrative assistance and allows the transmission of bank information abroad without taking into account the particularities of an "irrevocable discretionary" trust. The judgement is published with the names. The non-publication of the names must be enforced by each individual in court.