Overview of tax law decisions by the Swiss Federal Supreme Court published between April 27 and May 3, 2026:
- Judgment of March 13, 2026 (2C_416/2025): The issue at issue was whether Article 23(2) of the Convention on Mutual Administrative Assistance in Tax Matters (MAC) establishes a right to suspend all administrative assistance proceedings in the requested state. Based on an interpretation that takes into account the purpose, context, and the explanatory report, the right to suspension is generally limited to administrative assistance procedures relating to enforcement and does not cover the exchange of information. Consequently, suspension does not apply to requests for information alone. Dismissal of the appeal filed by the affected individuals.
- Judgment of April 2, 2026 (9C_73/2025): State and municipal taxes for 2012–2016 (Zurich); The issue in dispute was the unlimited tax liability of the spouses A, who claimed that they had not transferred their tax residence from the Canton of Zug to the Canton of Zurich until March 23, 2019. In the opinion of the Zurich Cantonal Tax Office (appellant), the spouses A were already subject to unlimited tax liability in the Canton of Zurich during the period in question. The lower court rejected this and affirmed a “natural presumption of retention of the previous residence,” which the appellant was required to rebut. The Federal Supreme Court held that a change of residence—regardless of continuing ties to the former residence—must be assumed if the ties to the new location appear to be more significant overall, which it considered to be the case here. Contrary to the lower court’s reasoning, there was no “natural presumption of retention of the previous residence” that the tax authority was required to rebut. Instead, it must be examined where the center of the taxpayer’s vital interests was located. It further referred to recent case law regarding the place of actual management of a legal entity and stated by analogy that “in tax law, full proof is not required; rather, the standard of proof of preponderance of probability is sufficient.” Upholding of the tax administration’s appeal.
- Judgment of April 10, 2026 (9C_216/2025): Direct Federal Tax and State and Municipal Taxes 2021 (Solothurn); The issue at hand was whether the departure of a sole shareholder to a foreign country transforms an existing current account credit balance in his favor into a simulated loan. The appellant, previously resident in the canton of Solothurn and the sole shareholder of a company based in the same canton, moved his residence to Germany on December 16, 2021. The Tax Office of the Canton of Solothurn classified the current account balance of CHF 791,752 as a simulated loan and treated it as a monetary benefit, a ruling upheld by the lower court. Of this amount, a balance of CHF 303,503 (“base loan”) already existed as of December 31, 2018, with only the increases in the loan amount during 2019 and 2020 being considered a simulated loan. The Federal Supreme Court agreed with the appellant to the extent that the base loan—which had been unproblematic until then—could not be deemed a simulated loan solely on the basis of the taxpayer’s departure. Partial granting of the taxpayer’s appeal to the extent of the base loan; dismissal of the appeal in all other respects.
- Judgment of April 1, 2026 (9C_704/2025): Cantonal and municipal taxes (Vaud); Joint and several liability of spouses; transitional law; The Canton of Vaud abolished the joint and several liability of separated spouses for jointly assessed tax debts, but applied the new law only to separations occurring on or after January 1, 2026. Two women who had separated earlier and were still being held liable for their ex-husbands’ tax debts challenged this transitional provision as indirect discrimination. The Federal Supreme Court examined only the transitional provision—not the constitutionality of the previous joint and several liability, which it had already affirmed twice. The legislature enjoys broad discretion in shaping transitional law; the cut-off date provision is based on objective grounds (avoiding new unequal treatment through retroactive application, administrative burden involving over 7,000 pending cases) and does not violate the principle of equal treatment. Dismissal of the appeal.
- Judgment of March 26, 2026 (9C_205/2025) – scheduled for publication: Direct Federal Tax and Cantonal and Municipal Taxes 2015–2018 (Valais); Tax exemption; provisions; A stock corporation wholly owned by municipalities in Vaud and Valais, established for the purpose of operating a waste incineration plant, lost its long-standing tax exemption because, in addition to waste incineration, it increasingly engaged in commercial activities—in particular, the operation of a district heating network as well as the production and sale of electricity, biogas, and compost—and these activities together accounted for roughly half of its revenue. According to the Federal Supreme Court, the concept of pursuing a public purpose within the meaning of Art. 56(g) of the Federal Tax Act must be interpreted restrictively. Energy production and sales remain commercial activities, even if the facility is legally obligated to recover energy. Since the commercial activities are not merely of a subordinate nature, a complete tax exemption is incompatible with the principle of competitive neutrality. The taxpayer had not applied for a partial tax exemption—which would have been possible in principle with a clear accounting separation. Additionally, the Federal Supreme Court confirms that the amounts recorded as “provisions for future work” do not constitute tax-deductible provisions under tax law, but rather reserves for future investments. Dismissal of the taxpayer’s appeal.
- Judgment of April 1, 2026 (9D_21/2025): Direct Federal Tax and State and Municipal Taxes 2022 (Basel-Stadt); The issue at hand is whether a pending appeal for the grant of legal aid has suspensive effect with respect to the obligation to pay an advance on costs in the ongoing tax assessment proceedings. The Federal Supreme Court answered in the negative. Accordingly, the appeal was rightly dismissed for failure to pay the advance on costs. Dismissal of the taxpayer’s appeal.
- Judgment of April 9, 2026 (9C_668/2025): State and Municipal Taxes 2020 (Schwyz); The issue at hand was whether a company domiciled in the canton of Schwyz had already switched from holding company taxation to ordinary taxation in 2018 and could therefore offset losses from 2018 against profits from 2020. The lower court did not act arbitrarily when it determined that the note in the 2018 tax assessment stating that taxation as a holding company under § 75 StG applied was part of the operative part of the decision and that the taxpayer was therefore bound by it. Furthermore, there is no unequal treatment merely because the tax administration’s practice notice, in which it stated that offsetting losses against losses from holding company taxation was not possible, was issued only after the taxpayer had filed her tax return. Dismissal of the taxpayer’s appeal.
- Judgment of April 9, 2026 (9C_117/2025, 9C_121/2025): Infrastructure development fee (Taxe d'équipement, Geneva); The dispute concerned an infrastructure development fee of CHF 535,933.65 that had been levied. The Court of Appeal overturned it on the grounds that the cost-recovery principle had not been observed at either the municipal or intermunicipal level, which the Federal Supreme Court deemed arbitrary: at both levels, tax revenues fell significantly short of actual expenditures; there was no excessive accumulation of reserves. The appeals of the City of Geneva and the Fonds Intercommunal d'Équipement were upheld.
- Judgment of April 8, 2026 (9C_421/2025): Federal Direct Tax and State and Municipal Taxes for 2022 (Thurgau); Subsequent Amendment of a Special Assessment; Upon termination of the employment relationship, the taxpayer’s employer made a payment of CHF 253,100 to the account of the employee pension fund to finance a pension gap. Shortly thereafter, the taxpayer withdrew the entire pension capital of CHF 622,747 in lump-sum form, which was separately taxed in accordance with Art. 38 of the Federal Tax Act (DBG). However, in the ordinary assessment procedure, the tax administration included the CHF 253,100 as income and indicated that a subsequent revision of the special assessment was likely. The Federal Supreme Court upheld the appeal: The legally binding special assessment precludes the same payment from being assessed again in the ordinary procedure. Since the tax administration was aware of the facts at an early stage and nevertheless issued the special assessment without further clarification, it is itself responsible for the assessment error and cannot invoke a subsequent revision. Upholding of the taxpayer’s appeal.
Non-occurrence:
Decisions are listed chronologically by publication date.
