Overview of tax law decisions by the Swiss Federal Supreme Court published between March 30 and April 5, 2026.
- Judgment of March 11, 2026 (9C_442/2025): Federal Direct Tax and State and Municipal Taxes for 2018 (Thurgau); The issue in this case was whether the Administrative Court of the Canton of Thurgau was correct in requiring that the costs incurred in connection with the renovation of an attic be divided into value-preserving and value-enhancing expenditures. The appellant—the Tax Administration of the Canton of Thurgau—argued that the attic renovation constituted a replacement structure and should therefore be classified entirely as value-enhancing. The Federal Supreme Court upheld the lower court’s decision, reasoning that the attic is merely a part of the building; therefore, even in the event of a complete demolition and reconstruction of the attic, it cannot be considered a replacement new construction. Rather, the individual works must be assessed based on their objective technical nature to determine whether they are value-preserving or value-enhancing. The appeal by the Tax Administration was dismissed.
- Judgment of March 11, 2026 (9C_443/2025): Direct Federal Tax and State and Municipal Taxes for 2021 (Thurgau); The issue in this case was whether the Administrative Court of the Canton of Thurgau was correct in requiring that the costs incurred in connection with the demolition and reconstruction of a sunroom be divided into value-preserving and value-enhancing expenses. The appellant—the Tax Administration of the Canton of Thurgau—classified the demolition and reconstruction of the sunroom as a replacement structure and thus considered it entirely value-enhancing. The Federal Supreme Court upheld the lower court’s decision and held—drawing on the decision issued on the same day regarding the (complete) demolition and reconstruction of an attic 9C_442/2025 —that the sunroom was not a standalone building but rather an “annex” and therefore did not constitute a replacement structure for tax purposes. The individual works must be examined according to their objective technical nature to determine whether they preserve or increase value. Dismissal of the tax administration’s appeal.
- Judgment of February 26, 2026 (9C_32/2025): State and Municipal Taxes 2021 (Solothurn); The issue in dispute is the tax exemption of the independent public-law institution A. Pursuant to Art. 23(1)(c) of the Tax Harmonization Act (StHG), the cantons are free to exempt municipalities and their institutions from tax liability in accordance with cantonal law. The legislature of the Canton of Solothurn has opted for a solution that does not allow the fulfillment of tasks prescribed by municipal law to suffice for a tax exemption for legally independent municipal institutions. There were no objective grounds for the previous comprehensive exemption—which existed prior to the amendment of § 90(1)(c) StG/SO. Dismissal of Institution A’s appeal.
- Judgment of March 11, 2026 (9C_261/2025): Federal Direct Tax and State and Municipal Taxes for 2018 (Zurich); The taxpayer was the owner of a listed villa in Zurich, which he partially leased to companies under his control. Since he provided contradictory information regarding rental income during the proceedings, the Federal Supreme Court upheld the discretionary assessment of CHF 150,000; It did not allow the deduction of flat-rate property maintenance costs of CHF 215,400 paid to a related company due to a lack of detailed documentation for the work performed and the failure to distinguish between value-preserving and value-enhancing work. Finally, the Federal Supreme Court denied the deductibility of interest swap payments totaling CHF 228,124 as private debt interest within the meaning of Art. 33(1)(a) of the Federal Tax Act (DBG): Since the loan agreement and the OTC framework agreement were concluded separately in terms of timing and contractually, without mutual reference and without synchronization of the terms, the necessary legal connection to the principal debt is lacking; the economic hedging purpose alone is not sufficient. Dismissal of the taxpayer’s appeal.
- Judgment of March 18, 2026 (9C_331/2024): Value-Added Tax 2016 and 2017; The issue at hand is whether managed care services constitute medical treatments within the meaning of Art. 21(2)(3) of the Value-Added Tax Act. The VAT Group A. AG was of the opinion that managed care services are an integral part of medical treatments and therefore fall under the tax exemption of Art. 21 para. 2 no. 3 of the VAT Act. The FTA, on the other hand, took the position that these were independent, flat-rate coordination services with no direct connection to specific medical treatments. A. AG is correct in arguing that, contrary to the FTA’s view, the HMO-specific services provided in individual cases are not merely “optimization services” that create the framework conditions for medical treatment “optimization services” that, as the Federal Administrative Court put it in another case, although always related to a specific medical treatment, had no relevant medical substance when viewed in isolation from such treatment. The applicable exemption does not depend on the characteristics of the recipient of the service. For this reason, it was also irrelevant if—in accordance with the agreed-upon third-party payer system—the health insurer were to be regarded as the recipient of the services. Ultimately, however, it can remain open whether services agreed upon in a framework contract, through which the system of coordinated medical care is concretely implemented in individual cases, still qualify as medical treatment within the meaning of Art. 21(2)(3) of the VAT Act or whether they are exempt from tax only after the entry into force of paragraph 3bis.
- Judgment of March 6, 2026 (9C_203/2025): Direct Federal Tax and State and Municipal Taxes for 2016 and 2017 (St. Gallen); The issue in dispute and subject to review is whether the lower court was correct in determining the taxable net profit for 2016 not on the basis of the corrected annual financial statements submitted in 2022, but solely on the basis of the originally submitted annual financial statements. The cantonal tax office added, among other things, provisions for warranty work that were not commercially justified to the taxable net profit for 2016. In doing so, it relied on the annual financial statements submitted in 2019 together with the tax return. In contrast, it classified the 2016 financial statements resubmitted during the objection proceedings in December 2022—which included employee wages—as an impermissible amendment to the balance sheet. The Federal Supreme Court upheld the decisions of the lower courts. Dismissal of the appeal filed by taxpayer Company A.
Non-occurrence:
Decisions are listed chronologically by publication date.
