Tax domicile conflicts are decided at the level of the facts, but the procedural level must not be neglected. Anyone who disregards the rules of evidence, the duties to cooperate or the applicable deadlines risks definitive double taxation or substantial cost consequences despite a sound position on the merits. This article summarises the procedural rules as refined and, in part, tightened by the Federal Supreme Court in 2025 and 2026. The substantive questions are addressed in separate articles on the tax residence of individuals, on the tax residence of companies and on the position in an international context.
I. TRIGGER AND COURSE OF TAX DOMICILE PROCEEDINGS
Tax domicile proceedings are frequently triggered by the filing of a tax return or by notification of a departure that the previously competent authority is unwilling to accept. For companies, the focus is on transfers of the registered office, on the residence and functions of the members of the governing bodies, or on irregularities in the tax file (for example the absence of rental and personnel expenses at the registered office); investigations may also be prompted by information from third parties or by notifications from other tax authorities. Information from criminal proceedings which the tax authorities have transmitted to foreign prosecution authorities by way of mutual legal assistance may likewise form the basis for tax domicile proceedings.
Where the tax administration harbours a suspicion, a formal request for documents (Aktenauflage) generally follows. In the case of individuals, it may call for floor plans, details of the furnishings, electricity and water consumption figures, or complete records of cash withdrawals and card payments. In the case of companies, it may call for evidence of premises, decision-making processes and presence at the registered office.
The scope of such requests can be considerable and at times appears disproportionate, coming close to a “fishing expedition”. In some cases the authorities also carry out their own enquiries and obtain relevant information – consumption data, for instance – themselves, without disclosing this from the outset.
Anyone contesting a canton’s tax sovereignty is, in principle, entitled to formal tax sovereignty proceedings (also referred to as tax domicile proceedings). The pending assessment or supplementary tax proceedings must be stayed, and the authority must first determine, in a binding tax domicile decision, whether it may tax the person concerned at all. The ordinary legal remedies are available against that decision.
The Federal Supreme Court has abandoned its previous practice as regards the effect of that decision.[1] In the Court’s view, the tax domicile decision is a preliminary or interlocutory decision and does not acquire substantive res judicata effect. The question of tax liability may be raised again when the subsequent assessment or supplementary tax order is challenged. This does not, however, apply without limitation: anyone who allows a tax domicile decision to become final without challenging it must cooperate in the ensuing assessment proceedings and cannot contest tax liability again absent a material change in circumstances. [2]
II. JURISDICTION – TWO SETS OF PROCEEDINGS, TWO AVENUES OF APPEAL
A. Diverging jurisdictions
It is frequently overlooked that cantonal tax domicile proceedings cover only the cantonal and communal taxes. For direct federal tax, the principle of the unity of the place of assessment applies: even where connecting factors exist in several cantons, only one single canton may assess the same taxable person for the same tax period.
Where the place of assessment is uncertain or disputed, it is determined by the Federal Tax Administration (FTA) as soon as more than one canton comes into consideration. Such a determination may be requested by the assessment authority, by the cantonal administration for direct federal tax and by the taxable person. The FTA’s order may be appealed to the Federal Administrative Court.
B. Determination of the place of assessment by the FTA
The cantonal tax and tax appeal authorities have no jurisdiction in this respect. Where a cantonal authority nevertheless determines its own jurisdiction to assess direct federal tax although it is obvious that another canton comes into consideration as the place of assessment, its decision and the appeal decisions confirming it are null and void. It makes no difference whether the canton rules on the place of assessment as the principal issue – by way of a tax sovereignty order – or merely as a preliminary issue within the assessment.[3] The nullity is, however, confined to direct federal tax; the tax domicile decision concerning the cantonal and communal taxes remains unaffected.
C. Parallel proceedings
In practice, two sets of proceedings therefore run alongside one another: the cantonal tax sovereignty proceedings, through the cantonal instances to the Federal Supreme Court, and the determination proceedings under Art. 108 of the Federal Act on Direct Federal Taxation (DBG), through the Federal Administrative Court. How closely the two strands can be intertwined is illustrated by a recent case in which the taxable person filed an objection against the cantonal assessment and, on the same day, requested the FTA to determine the place of assessment, while cantonal tax domicile proceedings were also pending.[4] No coordination takes place: the FTA may not stay its proceedings until the cantonal proceedings concerning the cantonal and communal taxes have become final.[5]Anyone pursuing the cantonal route alone risks not only that the position on direct federal tax remains unresolved, but also that the appeal is declared inadmissible for want of a challengeable decision. [6]
III. BURDEN OF PROOF, STANDARD OF PROOF AND DUTY TO COOPERATE
A. Principle
As a matter of principle, facts that establish or increase a tax liability must be proved by the tax administration, while facts that eliminate or reduce it must be proved by the taxable person. Where a canton claims tax sovereignty for the first time or anew, the burden of proof therefore lies with the tax administration.
B. Consequences for legal entities
For legal entities, tax sovereignty attaches to the registered office or to the place of effective management. Where a canton claims tax sovereignty on the ground that the effective management is located on its territory, it bears the burden of proving this, although the reduced standard of the balance of probabilities suffices for that proof.[7] If it establishes that the registered office in the other canton is a mere letterbox domicile, this constitutes a weighty indicium that the effective management is located on its territory. In that case, the legal entity must adduce counter-evidence (de facto reversal of the burden of proof) and demonstrate that it carries on substantial activities at the registered office or that the effective management takes place there.
C. Consequences for individuals
For individuals, tax sovereignty attaches to the centre of vital interests. Where a canton claims tax sovereignty for the first time or anew after a number of years, it bears the burden of proving the facts establishing the tax liability, and here too the reduced standard of the balance of probabilities suffices.[8] What is decisive is not a presumption in favour of the previous place of residence but an overall assessment of all indicia: the sole question is where the centre of vital interests was actually located. A transfer of residence does not require, in particular, that all ties to the previous place be severed. It is to be assumed as soon as the ties to the new place prevail on balance. [9]
D. Obligation to cooperate
Since the authorities are frequently unable to establish the relevant facts themselves, they depend on the cooperation of those concerned. Under the case law of the Federal Supreme Court, a certain duty to cooperate exists even before tax sovereignty has been established with final effect. Where the authority identifies sufficient indicia, it is for the person concerned to rebut them. To that extent, the burden of proof gives rise to a de facto duty to cooperate.
In addition, insufficient cooperation in tax domicile proceedings that have been legitimately initiated may, according to settled case law, be taken into account as an indicium to the detriment of the person concerned.[10] Silence can therefore cost more than an uncomfortable disclosure.
Where the circumstances are personal in nature, the duty to cooperate extends even into the private affairs of the shareholder. In the case of one-person companies, that person forms the “epicentre” of the enquiries. Private credit card and bank account statements may therefore, in principle, also be requested.
Failure to comply with the duty to cooperate may be sanctioned by a fine. The ordinary range extends to CHF 1,000, and in serious cases or in the event of a repeat offence to CHF 10,000. In our view, however, there is no breach of procedural duty where the person concerned submits other documents that are objectively suitable for clarifying the tax domicile and the documents called for are no longer available or could be obtained only by disproportionate means.
IV. ELIMINATION OF INTERCANTONAL DOUBLE TAXATION
Where the tax domicile is determined contrary to the taxpayer’s own view and the taxes have already been assessed with final effect in the other canton, actual double taxation arises. Such double taxation is prohibited under constitutional law (Art. 127 para. 3 Cst.) and must be eliminated. As a rule, the route to elimination leads via the Federal Supreme Court, which has the power to set aside assessment orders of the other canton even where these have already become final.
A. The bidirectional prayer for relief: an indispensable requirement
The Federal Supreme Court has recently tightened the formal requirements for lodging an appeal. In a recent judgment it held that the prayers for relief must be framed in “bidirectional” terms.[11]
In addition to the principal prayer directed against the one canton, a complementary alternative prayer directed against the other canton (which has already issued a final assessment) must be filed within the appeal period, together with an application for the refund of, and where applicable interest on, the taxes paid there.
The Federal Supreme Court has expressly abandoned its former practice, under which “no high requirements” were to be placed on the joint challenge to the other canton and an implicit alternative prayer sufficed. A presumption of an implicit joint challenge no longer applies as a matter of course. An alternative prayer submitted after expiry of the appeal period will be disregarded. Anyone taking only one canton to court therefore risks being left to bear the taxes paid in the other canton.
B. Forfeiture and cost consequences
Under the more recent case law, the right to have double taxation eliminated is forfeited only in the event of a qualified abuse of rights, such as the construction of an elaborate web of lies or the misrepresentation of facts. The threshold is high – but conduct contrary to good faith, or even merely unclear conduct, may be taken into account by the Federal Supreme Court when allocating costs:
In a judgment of 23 June 2026,[12] the successful company was ordered to bear all court costs notwithstanding that the assessments of the canton of its registered office were set aside; in addition, it had to pay the canton of Zug, against which it had prevailed, a party costs award of CHF 2,600. The same applies to a judgment of 22 July 2026:[13] the Federal Supreme Court rejected the second canton’s plea of forfeiture and set aside that canton’s final assessment – yet the successful taxpayer bore the court costs (CHF 3,000) and was awarded no party costs. Success on the merits therefore offers no protection against the cost consequences where a party’s own conduct in the proceedings gives cause for criticism.
V. REVISION AND RECONSIDERATION IN THE CANTON OF FIRST ASSESSMENT
Some cantons have included the elimination of intercantonal double taxation in their tax legislation as a statutory ground for revision.[14] It was long disputed whether double taxation could, beyond this, be eliminated on the basis of the Federal Constitution by way of an “extra-statutory” revision. The Federal Supreme Court provided clarity on this point in a judgment of 1 May 2025.[15] No entitlement to an extra-statutory ground for revision can be derived from the Federal Constitution. Apart from the statutory grounds for reopening a final assessment (revision, correction and supplementary taxation), there are no others.
The cantons are nevertheless free to reconsider final assessments in cases of intercantonal double taxation for as long as the route to the Federal Supreme Court remains open. Unlike revision, however, there is no entitlement to have the request taken up by the authority at all.
The cantons may, moreover, subject reconsideration to a time limit; a period of 90 days from notification of the other canton’s tax domicile decision is compatible with federal law. Anyone intending to rely on reconsideration must therefore keep this deadline in view from the outset.
VI. THE CRIMINAL LAW DIMENSION
If the tax domicile is not situated at the place previously declared and no taxes have been paid at the relevant place to date, the objective elements of the offence of tax evasion may be made out. The fact that the taxes were properly declared and paid elsewhere makes no difference. Only culpable conduct is punishable, however; in tax domicile cases there will as a rule – if at all – only be attempted tax evasion, the punishability of which requires intent. In practice, that proof is likely to succeed only in exceptional individual cases.
Nevertheless, some tax authorities combine tax domicile proceedings (in particular in the context of supplementary tax proceedings) with the opening of penalty proceedings; and where the taxable person has behaved improperly, the Federal Supreme Court expressly refers the cantons to the instruments of criminal tax law. There is thus a risk that, even where (legal) double taxation has been successfully eliminated, an economic double burden will remain if a fine for tax evasion is imposed. Finally, it should be noted that a fine exceeding CHF 5,000 in respect of direct federal tax entails the risk of an entry in the criminal record.
VII. CONCLUSION AND PRACTICAL CHECKLIST
The case law of 2025 and 2026 has significantly sharpened the procedural requirements in tax domicile cases. The following basic rules can be derived for practice:
- Respond to a tax authority’s first enquiry cooperatively and with supporting evidence, because insufficient cooperation may be treated as an indicium.
- Where the request for documents is very extensive and the documents called for are not available in full, respond with suitable alternative evidence rather than leaving the request unanswered.
- Keep the deadlines consistently in view – both for challenging the tax domicile decision and for a request for reconsideration in the other canton, where a period of only 90 days from notification of the tax domicile decision may already be running.
- In proceedings before the Federal Supreme Court, always frame the prayers for relief bidirectionally, including the refund of, and interest on, the taxes paid in the other canton.
In the event of a dispute at the latest, it is advisable to involve a specialist – because in tax domicile proceedings the conduct of the case increasingly determines the outcome. Here too, it is better to be safe than sorry.
[1] Vgl. BGE 151 II 657.
[2] Vgl. Urteil BGer 9C_602/2024 vom 25. März 2025.
[3] Vgl. BGE 150 II 244.
[4] Vgl. Urteil BVGer A-6994/2025 vom 21. Juli 2026.
[5] Vgl. Urteil BVGer A-6987/2025 vom 3. Februar 2026.
[6] Vgl. Urteile BGer 9C_706/2024 und 9C_154/2025 je vom 27. August 2025.
[7] Vgl. BGE 150 II 321.
[8] Vgl. Urteil BGer 9C_157/2025 vom 19.3.2026.
[9] Vgl. Urteil BGer 9C_73/2025 vom 2. April 2026.
[10] Vgl. zuletzt Urteile BGer 9C_702/2024 vom 13. Januar 2026; 9C_558/2024 vom 29. April 2025 und 9C_570/2024 vom 29. April 2025.
[11] Vgl. Urteil BGer 9C_652/2025 vom 9. Juni 2026.
[12] Vgl. Urteil BGer 9C_452/2025 vom 23. Juni 2026.
[13] Vgl. Urteil BGer 9C_391/2025 vom 22. Juli 2026.
[14] Konkret: Appenzell Ausserrhoden, Luzern, St. Gallen, Solothurn und Tessin.
[15] Vgl. BGE 151 II 673.
