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Daniel Vasella lost his appeal before the Zug Administrative Court.
Roman NeumanLeaf Maker Digital
It is thick mail that the very rich ex-Novartis President Daniel Vasella (69) and his wife received from the tax authorities of the canton of Zug on April 12, 2017: They sent them the tax assessment for 2013. That the couple resided in Risch ZG is said to have moved to Monaco, the tax administration did not believe.
The Vasellas defended themselves against the assessment – and are subject to the Zug administrative court, as the “SonntagsZeitung” reports. The verdict is in sight. And it shows how meticulously the tax investigators picked apart any evidence presented.
Especially the water and electricity consumption and the phone bills were telltale. And the Vasellas’ refusal to disclose the location of their cell phones also puzzled the court.
But what else failed Vasella? The evidence was quite extensive: He presented an Excel list with flight details, credit card statements, electricity and water bills, telephone bills from Monegasque landline and mobile phones and wage statements from domestic helpers in Monaco and Risch ZG. However, the tax authorities were not satisfied with this: they demanded further documents. Vasella had to submit flight tickets, a calendar showing the days of attendance per country and other invoices.
With all this information, the court conducted a circumstantial trial. Some information remained unclear, others spoke clearly against Vasella.
Personal relationships
Vasellas explain that they had “little social contacts in Monaco”. And they would have deliberately avoided the public in order not to be recognized. The court writes: “It is obvious that this criterion already speaks against a move to Monaco on the basis of this statement. In the present case, due to the brisk travel activity (…) it is quite appropriate to have doubts about this motive.” Among other things, because Vasella and his wife chose Zurich as the departure and destination airport for all flights with international destinations – “that is, the airport where they would be most likely to be recognized”.
Vasella also owns other properties in three different locations around the world. “They could probably have stayed there for a while too, in order to be able to withdraw and live without social contacts.” The fact that they are using a 268 square meter five-room duplex apartment in Monaco on the 11th and 12th floors of a block of flats – although they own other more spacious properties – does not speak for a residence permit. Their most important caregivers, the adult children, also stayed in Switzerland. That also speaks against a permanent residence in Monaco.
housing situation
According to the verdict in Risch ZG, Daniel Vasella owns a villa with an estimated 1400 square meters, a swimming pool, and a landscaped area by the lake. A magnificent property. The Vasellas also bought the property next door. In addition, the household help remained permanently employed, as can be seen from the payslips.
The rented apartment in Monaco would be a dream for others – compared to the villa in Risch, it seems almost puny, despite the outdoor pool. Or as the court put it: “The apartment in Monaco could not even come close to offering the usual comfort of living of the applicants (…), which does not speak for taking up residence in Monaco.”
In 2013, the Vasellas moved furniture, sofas, lamps, books and clothes to Monaco – but art objects made up the largest item. 62 works were brought from Switzerland to Monaco. However, he left most of the art that the ex-Novartische boss owned in Switzerland. All in all, the court finds that equipment and transport do not give a clear result about the place of residence.
The fact that Vasellas neither canceled health insurance in Switzerland nor set up a postal forwarding order was “difficult to understand” for the court.
stay days
He was in Monaco for 131 days and in Risch ZG for 57 days. This was stated by Daniel Vasella when he appealed against the decision of the Zug tax authorities. His wife spent 193 days in Monaco and 46 days in Risch. However, Vasella got tangled up in contradictions: For eight periods of stay in Monaco shown in the calendar, the tax investigators found that his credit card statements showed payments in Switzerland, Germany, Austria and the USA at the same time.
For example, a plane ticket shows that Vasella was on a flight from Shanghai to Zurich on November 3, 2014 – but according to his listing he would actually have been in Monaco. The investigators found several such examples. And the court states: “The probability that the applicants could have been wrong about the actual whereabouts of a total of 33 Monaco stays listed in the calendar (…) can be considered very low.” Conclusion: The calendar should not be trusted due to the many inconsistencies.
The alarm system
There are large and small indications that the court evaluates. The mobile phone bills, all of which speak against permanent residence in Monaco, are one thing. For example, the court considers it “remarkable” that the contract between the security company and Vasella specifies three telephone numbers that should be called in the event of a burglary – and if the alarm system goes off: First and foremost is Vasella’s Swiss cell phone number , in second place the number of the fixed network connection in Risch and only in third place his cell phone number in Monaco.
More clues
Why did the Vasella couple always fly via Zurich to get to Monaco? Nice, France’s third largest airport, is much closer. The multi-millionaire said it doesn’t make a big difference in time whether you fly or drive this route. This adventurous reasoning was dismantled by the court.
According to Google Maps, driving from Monaco to Nice Airport takes around 35 minutes. According to the Swiss airline, the flight from there to Zurich takes 75 minutes. If you add an hour’s stay before departure at Nice Airport, the total travel time is just under three hours. According to the respondents, the drive from Monaco to Zurich Airport takes between 7 and 8 hours.
All of this evidence was Vasella’s undoing before the administrative court – and in addition to the amount of tax to be paid in arrears, it also cost him 25,000 francs for the “extraordinarily high expenditure of time and work”.
The effort for the Zug tax office should have been worth it, Daniel Vasella’s fortune is estimated by the “balance sheet” at 375 million francs. Or as the court states: The disputed tax amount is “extremely” high.