VAT: AFC MUST PROVE THE NON-CONGRUITY OF PROPERTY RENTALS WITH RESPECT TO MARKET VALUE

TAF (Swiss Federal Administrative Court), with sentence no. 12.4.2022 A-4878/2020, recently expressed on the conditions that must regulate, for VAT matters, the transactions that take place between close people. In the present case, AFC (Swiss Federal Tax Authority), resumed the value of the rent of a commercial property paid by a person close to the lessor company, judged too low compared to the market value. According to TAF, to establish the fairness of the price, it is appropriate to follow a global, representative and homogeneous comparability analysis, on a sufficiently large sample, based on the characteristics of the goods transferred or the services provided, the functions performed by the parties, the capital employed and the risks assumed, the terms of the contract, the economic situation of the subjects involved, the size of the company and the regional conditions.

TAF reminds that the burden of proof rests with the AFC, which must also prove and justify the methods of estimation and the size of the sample.

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