Taxation of Foreign Board Fees for Swiss Residents

The taxpayers appealed a tax assessment for the year 2015 regarding board of directors' fees and the simplified accounting procedure. The core issue involved whether the board fees received by the taxpayers, who were members of the board of a foreign company, were taxable in the canton of residence, considering that the foreign company was not subject to taxation in the canton and the fees were taxed in the country of the company's seat under a bilateral agreement. The court reasoned that despite the existence of a double taxation agreement that allocated taxing rights for director fees to the country where the company is domiciled, the domestic law (specifically, the relevant cantonal tax law concerning board remuneration) allowed for the taxation of such income if the recipient was a resident, and the agreement did not explicitly exclude this taxation or stipulate that the income was to be exempted or subject to a credit method; thus, the court upheld the cantonal tax assessment on the remuneration.