Legal basis for the collection of taxes & fees

When the state levies public taxes or fees, it requires a legal basis, which must be sufficiently determined. The legal basis must at least specify the taxpayers, the subject and the assessment bases. If this basis is missing, the levy is unlawful and can be contested.

Public levies such as taxes or fees generally require a basis in law to comply with the principle of legality. This is to prevent the state from arbitrarily collecting fees. Furthermore, the legal basis must at least contain the group of taxpayers, the subject and the assessment bases themselves. If these conditions are not met, a levy is unlawful.

On October 12, 2018, the Federal Court decided on case 2C_699/2017, which contested the legality of parking fees. In the municipality of Reichenburg in the canton of Schwyz, a couple had bought a multi-family house lacking its own parking spaces. For the three missing parking spaces, an alternative levy of 15,000 Fr. (5000 Fr./parking space) was paid to the municipality by the then builders. The couple, as buyers of the house, were then informed by the municipality that they had the right (without claim to exclusive use) to park three vehicles in public parking spaces, and they later also received three free, indefinitely valid parking cards. In 2014, the couple transferred the house to their son. In 2015, the municipality presented its new parking concept, whereby an annual parking card for a public parking space for private individuals would now cost 800 Fr. per year. The previously issued parking cards were no longer valid. The son, as the new owner of the house, objected to this and took the case to the Federal Court due to rejections.

His arguments were very broad. He claimed, among other things, a violation of the right to be heard, the prohibition of hyper-formalism, and formal denial of rights, as well as the principle of good faith, all of which were declared unfounded by the Federal Court. However, he successfully argued the violation of the legality principle in connection with the levy of the fee for the use of parking spaces on public property. The new parking fee was based on Art. 3 para. 4 of the Road Traffic Act (SVG) in conjunction with § 36 of the Road Traffic Act Schwyz (StraG/SZ) and §§ 81 f. of the Judiciary Act Schwyz (JG/SZ) in conjunction with the Fee Regulations of the Canton Schwyz. However, the Federal Court clarified that Article 3 para. 4 SVG does not constitute a legal basis for levying a use fee for parking spaces. The same applies to § 36 StraG/SZ, which stipulates the responsibility of the road carrier, in particular to make traffic regulations according to federal law. And §§ 81 f. JG/SZ is also not applicable here, as the subject of the levy is not determined sufficiently and anyway it is questionable whether this law could be drawn upon, as it regulates the organization and responsibilities of judicial authorities. Lastly, the Federal Court stated that the levy of parking fees was not provided for in the Fee Regulations of the Canton Schwyz either. Thus, the complaint was upheld by the Federal Court, since the levy of parking fees did not have sufficient legal basis.‍

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