Trust And Illegal Tax Avoidance

Summary of ATF 9C_715/2022, of 19 July 2023

In two recent judgments, rendered in the same case (the Arrêt du Tribunal fédéral ("ATF") under review and the ATF of 25 November 2022, 2C_700/2022), the Swiss Supreme Court (Tribunal fédéral "TF") examines whether the creation of an irrevocable foundation or trust under foreign law, through the transfer to this foundation or trust of very important corporate and industrial assets, constitutes a case illegal tax avoidance.‍

1. Facts

At the end of a tax recapturing procedure for the 2010 and 2011 tax years, a Geneva taxpayer (the "Taxpayer") had considerable amounts of direct income and wealth taxes recaptured by the Geneva cantonal tax authorities (Administration fiscale cantonale de Genève "AFC"). The amount of the tax recapturing, taking all taxes together, was approximately CHF 57,900,000, plus a fine for illegal tax avoidance of of ¾ of this amount (i.e. a further approximate amount of CHF 43,000,000; editor's