Main tax domicile - a tricky business

A lasting issue in tax disputes between the Cantons concerns the question of personal affiliation to a Canton, i.e. the question of the place of unlimited tax liability.

The transfer of the tax domicile or the attempt to move to a Canton that is more optimal from a tax perspective is a tricky business and sometimes a source of conflict for natural persons.

The first part of the following article provides an overview of the general principles as well as, on the basis of current decisions, the Federal Supreme Court's jurisdiction. Part 2 examines the various options for changing a tax domicile and part 3 examines how the Cantons claim tax sovereignty. From the perspective of the tax authorities a "moving-away issue" becomes apparent in part 2 and a "moving-in issue" in part 3. This exact distinction is essential for the taxpayer's obligation to cooperate, as is showed in the following.

(1) General principles

According to permanent jurisdiction, the residence for tax purposes is located at the place of the centre of interests of the taxable person. Once established, the tax domicile remains in force until a new domicile is established. For the establishment of a domicile, an objective, external characteristic and additionally an internal characteristic, showing the intention of permanent residence, which has to manifest itself externally, is needed. The main tax domicile is therefore not freely selectable.

The determination of the tax domicile must be clarified or proven ex officio by the tax authorities due to the inquisitorial principle. Consequently, the tax authority would actually bear the consequences of the lack of evidence (objective distribution of the burden of proof). But the Federal Supreme Court recognises various actual assumptions, on the basis of which the lack of evidence can not even come to pass. An important assumption is the following:

If, on account of certain family circumstances, the centre of life is to be assumed to be in a certain place for several tax periods and the tax authority does not encounter any evidence on the contrary (basis of presumption) in its investigation, it must be concluded that nothing has changed in the relevant circumstances (presumption sequence) and that the centre of interests remains in the said location for the following tax period. If the conditions for this presumption of fact are met, the person liable to pay the tax must provide evidence to the contrary and prove that the basis or sequence of the presumption does not apply. On the one hand, it can be shown that the centre of life was already wrong in the previous periods. On the other hand,it may be argued that the circumstances have changed during the relevant period. (see BGer 2C_73/2018 of 3 June 2019, E. 3.3, m.m. )

Special features for husband and wife

Spouses are generally subject to taxation of spouses, i.e. they are taxed jointly, and have therefore a common tax domicile (cf. Art. 9 para. 1 DBG and Art. 3 para. 3 StHG). However, it should be specified that the spouses' place of residence is determined separately and that this rule constitutes a natural presumption (see Articles 23 and 24 ZGB). Consequently, spouses with different tax domiciles, so-called "living apart together", bear a duty to cooperate or a substantiation burden for different tax domiciles, in order to avoid the natural presumption.

Spouses are only treated as separate tax subjects if the marriage is no longer existing and, in addition, there is no commonality of means for housing and maintenance, i.e. no joint accounts for current obligations. In tax law, a "living together apart" is not possible under the Federal jurisdiction (see Art. 114 ZGB).

When assessing the common domicile, the principle applies in the case of relationships to different places that the personal and family relationships are considered stronger than the relationship to the place of work, provided that the person regularly returns to the family place (commuter / weekly resident). However, if the place of weekly residence and the place of work coincide, the main tax domicile is regularly located at this place due to the coincidence of material and non-material interests.

(2) Change of tax domicile

Decision BG 2C_170/2019 of 19 September 2019 concerns a couple who wishes to transfer their tax domicile from the Canton of Basel-Land to the Canton of Schwyz. The couple rents a 2.5 room apartment in a detached house in the Canton of Schwyz at a low rent of 800 CHF per month, in which another person lives for subletting. Their large, luxurious condominium is still fully furnished and not rented out, but they have cancelled subscriptions with the telecommunications provider and adjusted the contracts with the health insurance company. However, two sport cars are still registered in the Canton of Basel-Land, which according to the couple are only summer cars. In addition, the husband is still working in the Canton of Basel-Land and stays in the condominium two to three times a week. The Federal Supreme Court leaves the question of the fictitious domicile open, because regardless of whether the subjective of permanent residence is fulfilled, an intention to remain in the Canton of Schwyz is not yet legally sufficiently manifested in an objective manner in order to establish a new tax domicile there.

The facts of BGer 2C_265/2019 of September 11, 2019 concern the 2008 and 2009 tax assessments of Mr. and Mrs. A. Mr. and Mrs. A. moved from the canton of Zurich to the canton of Schwyz in the course of 2008. However, they kept their property in the canton of Zurich, which they made available to their son free of charge, and still used the property as a correspondence address. The complainants' main argument was that the wife was suffering from a mental illness during the period in question, as a result of which the couple spent an extended period of time in an apartment they owned in Florida. On her return to Switzerland, the wife stayed mainly with her husband's sister in Ticino. The appellants failed to substantiate why their center of life should be in the canton of Schwyz during the relevant tax period. The Federal Supreme Court dismissed the couple's appeal regarding the establishment of a tax domicile in the canton of Schwyz and confirmed the previous tax domicile in the canton of Zurich.

BGer 2C_415/2019 of 20 December 2019 deals with the assessment period from 2004 to 2010 of taxable subject A. The period between 2004 and 2008 is not disputed by any party. During this period, the Canton of Lucerne was concluded as tax domicile on the basis of the following indications: A owns a condominium with a high fit-out standard in the Canton of Lucerne, in close proximity she had her dog cared for by a veterinary, subscribed to several periodical magazines at this address and let various orders from onlinestores be delivered there. In 2009, she registered in the Canton of Zug, initially declaring her office premises as her residence and only applied for a 1.5 room apartment after the intervention of the local authorities. The condominium in Lucerne was still available to A. The Cantonal Tax Authoritie of Lucerne did not regard the apartment in Zug as an indication of changed relationships. This lead to the assumption that the relevant circumstances have not changed. The Federal Supreme Court protects the application of this presumption. It points out that, in this situation, taxable subject A. could have either shown that the centre of her life had already been wrongly established in previous periods or that the circumstances have changed significantly in the period of 2009.

CONCLUSION on the change of tax domicile

These verdicts are illustrative for the requirements for a change of tax domicile. Although the tax domicile is a tax-related fact and is therefore generally to be proven by the authorities on the basis of the principle of investigation. If it does not wish to recognise it, the taxpayer is required, as part of his duty to cooperate, to stubstatiate the establishment of a new tax domicile. The taxpayer's duty to cooperate applies wherever a "moving away" occurs from the view of the assessment canton, i.e. where the incident has a tax-reducing or tax-excluding effect.

In the context of substantiation, the focus should not be on the final resolution of the connection to the previous residence, but it must be explained in detail to what extent the new center of life is at the new residence. In other words, circumstances (evidence) must be presented which indicate the manifestation of the intention to remain in the new place permanently.

(3) Utilization of tax sovereignty


The claim is about the moving in of a taxpayer, so up to that point there was no personal affiliation in the canton or in Switzerland in any case. Thus there is, in principle, the normal burden of proof on the assessment authority to establish the taxable fact. This is subject to natural presumption, which leads to a cooperation or a substantiation burden of the taxable person.

BGer 2C_480/2019 of 12 February 2020 concerns the tax liability of a spouse whose wife and youngest son reside in Switzerland (St. Gallen) and are also liable to pay tax there. The spouse on the other hand, is a resident abroad; thus the model "living apart together". Here, the natural presumption of joint residence of the spouses applies: it is not sufficient, that the taxpayer affected by the presumption defensively denies that the residence is not in Switzerland. To overturn the presumption, the taxpayer must actively demonstrate how and where he stayed during the tax period in question and why the foreign stay was intended to be permanent. In the present case, without going into the complex details of the individual case, the spouse was intent on defending himself. As a result, he was not able to plausibly demonstrate that his residence is located outside of Switzerland. Consequently, he could not overrule the natural presumption of joint marital residence; his appeal was dismissed.


The verdict of  BGer 2C_533/2018 of 30 October 2019 is based on the initial constellation in which the childless spouses A. rented a 4.5-room apartment in Nidwalden and the wife owning a property, a detached house with a garden, in the Canton of Solothurn. The husband works as an ophthalmologist in a clinic in the Canton of Nidwalden, while the wife works 70% of her working hours  as a practice assistant in a clinic in the Canton of Solothurn. There is no information about the duration of the spouses' stay at the respective domiciles, but due to the fact that the tax authorities of the Canton of Solothurn have recognised the Canton of Nidwalden as the main tax domicile, it is assumed that the wife has spent part of the week in the Canton of Nidwalden and the husband himself was not much in the Canton of Solothurn.

For the contested assessment period of 2014, the husband's employment situation changed to the effect that he was incapable of working throughout the year due to a motorcycle accident. Due to the changed working situation, the tax authorities and later also the tax court of the Canton of Solothurn concluded that the main tax domicile is to be situated in the Canton of Solothurn. This view was not followed by the Federal Supreme Court. The mere fact that the husband's employment situation changed does not allow this conclusion to be drawn. Furthermore, the authorities of the Canton of Solothurn did not take sufficient account of the couple's housing situation or was unable to prove that it was incorrect. According to the information provided by couple A., the wife was staying in Nidwalden for about three days a week during 2014. The husband stayed, as far as no stay in hospitals / rehabilitation clinics, in the apartment in the Canton of Nidwalden, because due to the consequences of the accident the stay in the multi-storey home in Solothurn would have been inconvenient / impossible. The Federal Supreme Court leads to the opposite conclusion that due to the accident-related changes, the ties with the former domicile Canton of Nidwalden were strengthened. The complaint against the Canton of Solothurn was therefore upheld.

This decision makes it clear that real estate ownership is only an indication in the question of residence. Furthermore, the current principle that personal and family relationships are considered to be more important than the relationship to the place of employment, provided that people return regularly to the place of family, is upheld.