Overview of tax law decisions by the Swiss Federal Supreme Court published between March 9 and 15, 2026:
- Judgment of February 9, 2026 (9C_126/2024): Direct Federal Tax 2016; In 2016, A. transferred real estate and business interests to his children through a mixed gift. The property at J. Street was sold by daughter C. for CHF 11 million to pay off debts of the family business. The Zurich Cantonal Tax Office classified the property as business assets and recognized a liquidation gain of approximately CHF 3.9 million. The issue in dispute was whether A. had engaged in commercial real estate trading. Arguments against commercial trading included: no systematic intention to sell (long-term lease of approx. 20 years), long holding period (development phase 1984–1997 involved only purchases; divestment began only in 2012 upon reaching retirement age), external financing not typical of a business (diversified portfolio, urban location), no specific professional connection (electrical industry), age-related succession planning. Furthermore, the tax authority had accepted the property as private assets for 30 years; good faith sets limits on subsequent reclassification. The use of the proceeds for business purposes does not alter the nature of the property as private assets; the original intended use (rental, retirement planning) remains decisive. The appeal by A.’s heirs is upheld; the case is remanded for reassessment.
- Judgment of January 29, 2026 (2C_508/2025):Subsidies (Valais); the dispute concerned a request submitted to the State Council of the Canton of Valais for financial support for the renovation of a property listed in the inventory of municipal heritage sites. The State Council declined to consider the request on the grounds that the property was listed in the municipal—and not the cantonal—inventory, meaning that the canton lacked jurisdiction to provide financial support. The Federal Supreme Court found no violation of law in this decision. The petitioners’ appeal was dismissed.
- Judgment of January 29, 2026 (9C_156/2025) – scheduled for publication: Direct Federal Tax and State and Municipal Taxes 2022 (Geneva); The dispute concerned the interpretation of the term “third-party childcare” within the meaning of Art. 33(3) DBG and the corresponding cantonal provision. The taxpayers claimed childcare expenses for their two children, who attended themed camps during school vacations as well as creative courses on Wednesday mornings when school was not in session. The cantonal tax administration and the administrative court of first instance limited the deduction to CHF 250 per vacation week on the grounds that the programs in question served primarily for the children’s education and not for their care. The Cantonal Court, as the court of second instance, however, confirmed the full deductibility, as the taxpayers were able to demonstrate the direct causal link between the third-party childcare utilized and their gainful employment. The tax administration appealed this decision to the Federal Supreme Court. The Federal Supreme Court confirmed the direct causal link between third-party childcare and the childcare needs of working parents and held that the deduction should not be denied solely because the childcare services utilized went beyond mere supervision—especially since daycare facilities are required under federal law to offer age-appropriate activities. The Federal Supreme Court left open the distinction from luxury expenses, as the claimed costs were clearly not to be classified as such. Dismissal of the tax administration’s appeal.
- Judgment of February 23, 2026 (9C_17/2026): State and municipal taxes for 2013, 2015–2016 (Geneva); Tax evasion; the issues in dispute were the offsetting of income and the imposition of a tax evasion fine on the taxpayers in connection with a loan granted in 2013 by a company of which they were the sole shareholders. The Federal Supreme Court concluded—in agreement with the lower courts—that this was a simulated loan, which was to be offset as a monetary benefit. In its reasoning, it referred in particular to the taxpayers’ precarious financial situation in 2013, the absence of a written loan agreement, and the fact that the loan accounted for approximately two-thirds of the company’s assets. Even the subsequent repayment of the loan, including interest, did not alter this conclusion, as the tax assessment must be based on the date the loan was granted. Dismissal of the taxpayers’ appeal.
Non-occurrence:
Decisions are listed chronologically by publication date.
