Criminal case, new facts, review of tax assessments that have become final

Several years after being taxed, the past comes back to haunt the taxpayer with the opening of criminal proceedings which find them guilty and order a compensatory claim in favour of the State. The taxpayer requests a review of their past tax assessments.

Federal judges recall that a new fact is «a fact that was previously unknown but [which] already existed at the time of the decision. [...] Therefore, facts subsequent to the decision are in principle excluded. If, however, they existed latently from the outset, they may justify a review in that they retroact to the date the decision was made and render the assessment of facts at that time inaccurate.» (consideration 4.1.).

Has the clock started ticking on the deadline to request a review from the notification of the judgment convicting the taxpayer in the final instance, as the cantonal judges argue? The question remains open, and we are left wanting.

Federal judges left the question open, as they found a way to conclude their judgment: the compensatory claim, «based on the awarded damages, does not, as such, constitute a penalty aimed at reducing illicitly obtained profit. It does not have an objective causal link with the income earned by the respondent in the exercise of their activity as a lawyer, and it was awarded in connection with the [taxpayer's] fault within the criminal offences they had committed. Furthermore, the rules on civil liability, which justified the compensatory claim in connection with the awarded damages, aim to restore the injured party to the situation they would have been in if they had not been subjected to the unlawful conduct of the party causing the damage. The analogy drawn by the cantonal court with penalties aimed at reducing profit therefore does not stand up to scrutiny, given the nature of the civil claims made by the [injured company] in the criminal proceedings. These aimed to restore the [injured company] to the situation it would have been in had the taxpayer not committed criminal offences, and not to reduce illicitly obtained profit. Consequently, the compensatory claim is not a charge justified by commercial use and therefore is not tax-deductible from taxable income.

The ruling is in French. It is a case from Geneva. Publication in the Federal Supreme Court is planned.

TF, arrêt 9C_75/2024, du 25 février 2025