Change of tax domicile in Switzerland: burden of proof and jurisdiction

Principles of tax domicile in Switzerland

A frequent point of contention in intercantonal tax law is the question of the place of unlimited tax liability, i.e. the main tax domicile. Particularly in the case of natural persons, the transfer of domicile, especially to a canton with more favorable tax laws, regularly causes conflicts.

According to established Jurisprudence , a person's tax domicile is the place where the center of their vital interests, as determined by objective, external circumstances, is located. Two conditions must be met in order to establish a new main tax domicile:

1. actual residence (objective)

2. and the intention to stay permanently (subjective).

The decisive factor here is not the personal will of the natural person, but the objectively recognizable intention.

The tax domicile is therefore not freely selectable. Indications such as the filing of documents or the exercise of political rights can provide clues, but are not decisive on their own (see on the whole BGer 9C_173/2024 of December 19, 2024, E. 3.3).

The transfer of domicile does not require a complete severance of ties with the old domicile. It is sufficient that the connections to the new place of residence appear to be more relevant when viewed as a whole (see BGE 150 II 244, E. 5.6.5).

Burden of proof for tax domicile: Who has to prove what?

In applying the principle of investigation, it is the responsibility of the tax authorities to prove all relevant facts. If the tax authorities cannot establish a relevant fact directly with reasonable effort, they may use circumstantial evidence and infer facts from this (so-called natural presumptions). The taxpayer can rebut this natural presumption by refuting the circumstantial evidence (presumption basis) or the relevant fact (presumption consequence) (see BGE 148 II 285, E. 3.1.1 and 3.1.2).

With regard to the main tax domicile, the Federal Supreme Court recognizes the following natural presumption:

If, on the basis of certain family circumstances during several tax periods, it can be assumed that the center of vital interests is at a specific location and the tax authority does not come across any indications to the contrary during its investigation (presumption basis), it must be concluded that nothing has changed in the relevant circumstances (presumption consequence) and that the center of vital interests for the subsequent tax period is still at the said location (see BGer 2C_73/2018 of 3 June 2019, E. 3.3).

The taxpayer can overturn this natural presumption by providing evidence,

- that the center of vital interests was incorrectly determined in previous periods (rebuttal of the presumption basis) or

- the circumstances have changed in the relevant period (rebuttal of the presumption).

Consequences of a lack of evidence: Objective burden of proof in tax law

If a relevant fact cannot be proven by the tax authority despite all reasonable efforts to investigate, the question arises as to who bears the consequences of the lack of evidence (so-called objective burden of proof).

In principle, the objective burden of proof for a fact lies with the person who derives rights from it (Art. 8 ZGB by analogy). In tax law, practice has concretized this principle to the effect that facts justifying and increasing tax must be proven by the tax authority, facts excluding and reducing tax must be proven by the taxpayer (see BGE 148 II 285, E. 3.1.3).

If the taxpayer moves to another canton and wishes to establish a new tax liability there, this is known as a "departure situation". For the canton of departure, this has a tax-reducing or tax-excluding effect. The canton of departure can rely on the natural presumption that the relevant circumstances have not changed and that the tax domicile is still at the previous location. If the taxpayer does not succeed in overturning the natural presumption, he bears the consequences of the lack of evidence and the previous tax domicile remains.

In the event that a canton wishes to establish a new tax liability after having recognized in previous years that the tax domicile is located in another canton, this is known as an "influx situation". This fact has the effect of justifying or increasing the tax for the canton of relocation. It is therefore up to the tax authorities of the canton of relocation to prove that the relevant circumstances have changed. If they are unable to do so, they bear the consequences of the lack of evidence and the previous tax domicile is retained. However, the taxpayer is also obliged to cooperate to a reasonable extent.

Practical case: Relocation facts

The Federal Supreme Court ruling 2C_415/2019 of December 20, 2019 dealt with the assessment horizon of taxable person A from 2004 to 2010. The period between 2004 and 2008 was not disputed and tax residence in the canton of Lucerne was assumed on the basis of various indications: Person A owned a condominium with a high standard of finishing, had her dog veterinarian cared for in Lucerne, subscribed to magazines and had orders delivered to this address.

In 2009, person A registered in the canton of Zug, initially declaring office premises as their place of residence and later renting a 1.5-room apartment, although the condominium in Lucerne was still available. The cantonal tax authorities of Lucerne did not regard this as a change of circumstances, which is why the presumption arose that the tax domicile was still in Lucerne. The Federal Supreme Court confirmed the application of this natural presumption and pointed out that person A could have shown that the center of residence had already been incorrectly established in previous periods (rebuttal of the presumption basis) or that the circumstances had changed significantly in 2009 (rebuttal of the presumption consequence).

The ruling clarifies the requirements for a change of tax domicile in connection with relocation issues. As part of their duty to cooperate, taxpayers must substantiate the requirements for establishing a new tax domicile. If they fail to do so, they bear the consequences of a lack of evidence.

Practical case: Immigration facts

The BGer ruling 2C_533/2018 of October 30, 2019, concerned the married couple A.B., who rented a 4.5-room apartment in Nidwalden, while the wife owned a detached house in Solothurn. The husband worked as an ophthalmologist in Nidwalden, while the wife worked 70% in Solothurn. As the tax authorities of the canton of Solothurn recognized the main tax domicile in the canton of Nidwalden, it can be assumed that the spouse lived partly in Nidwalden, while the husband did not spend much time in the canton of Solothurn.

In 2014, the spouse's income situation changed due to a motorcycle accident that left him unable to work for the entire year. The tax authorities of the canton of Solothurn then concluded that the couple's main tax domicile was now in Solothurn. However, the Federal Supreme Court did not follow this view. The fact that the income situation had changed was not sufficient to transfer the domicile. In addition, the authorities had taken too little account of the spouses' residential situation and were unable to prove that it was incorrect. According to the spouses, the wife spent three days a week in Nidwalden in 2014, and the husband remained there because it was difficult to stay in the family home in Solothurn due to his accident. The Federal Supreme Court found that the changed circumstances even strengthened the bond with the previous domicile in the canton of Nidwalden and upheld the complaint against the canton of Solothurn.

The ruling clarifies the requirements for a change of tax domicile in connection with relocation matters. The tax authority of the canton of relocation must prove that the relevant circumstances have changed. If it fails to do so, it bears the consequences of the lack of evidence and the previous tax domicile remains. This applies in any case if the taxpayer has fulfilled their duty to cooperate to a reasonable extent.