Decisions of the Swiss Federal Supreme Court (CW - 2026)

Overview of tax rulings by the Swiss Federal Supreme Court published between February 9 and 15, 2026:

Judgment of January 14, 2026 (9C_153/2025): Direct federal tax and state and municipal taxes 2013–2021 (St. Gallen); the issue in dispute in this case was the retroactive revocation of a tax exemption. The tax administration had exempted the A. Foundation from tax by order of August 16, 2013. After a hidden profit distribution from another canton was reported in 2016, it requested the foundation to submit further documents on December 1, 2020, and subsequently revoked the foundation's tax exemption in a decision dated November 17, 2021, declaring it taxable since its establishment. Like the lower court, the Federal Supreme Court is of the opinion that the principle of good faith protects the foundation's trust, according to which the tax exemption continues to apply until an investigation into the tax exemption is initiated. Dismissal of the tax administration's appeal.
Judgment of January 14, 2026 (9C_189/2026): Official assessment 2020 (Graubünden); After the Federal Supreme Court referred the matter back to the lower court in its decision of April 19, 2023 (see our article of May 7, 2023), the lower court found that the Real Estate Valuation Office had violated the right to inspect files. However, this could be remedied by the administrative court's decision. In the opinion of the Federal Supreme Court, however, a remedy is not possible in the present case because the lower court did not have full jurisdiction. In addition, the lower court itself violated the right to inspect files by only informing the taxpayer of the content of files classified as secret in its decision. The taxpayer's appeal was upheld.
Judgment of January 16, 2026 (9C_470/2025): Direct federal tax and state and municipal taxes 2011 (Vaud); The Vaud Cantonal Court did not hear an appeal due to failure to pay the advance on costs. The taxpayer claimed before the Federal Supreme Court that she had never received the relevant decision. She provided evidence of repeated misdeliveries to her mailbox with copies of mail addressed to neighbors and referred to her request for confirmation of receipt of the appeal before the payment deadline expired. The Federal Supreme Court considered the evidence submitted and the argumentation to be valid. Appeal by the taxpayer upheld.
Judgment of December 29, 2025 (9C_622/2024) – scheduled for publication: Real estate gains tax St. Gallen (2021); Demolition of old buildings and replacement with new buildings; The lower court considered that the demolition of buildings on the sold property did not mean that the purchase price had to be adjusted for the purposes of calculating the property gains tax; rather, the full purchase price had to be taken into account in the expenses. According to BGE 149 II 27 (see our article of March 26, 2023), the costs of the buildings constructed to replace the demolished building were to be classified as value-preserving and were therefore deductible for income tax purposes and not for property gains tax, provided that they did not exceed the expenses for the demolished buildings. Nevertheless, in the present case, the lower court allowed these costs to be deducted on the basis of the principles of good faith and equal treatment, because otherwise the taxpayers would not have been able to deduct these costs from either their income or property gains tax as a result of the change in practice implemented by BGE 149 II 27. The reasoning of the lower court cannot be followed: when determining the taxable real estate gain, investment costs for buildings that no longer exist are not to be taken into account (principle of congruence); therefore, only the land portion of the purchase price is deductible. In contrast, replacement construction costs must be taken into account in full as investment costs for property gains tax; the change in practice in BGE 149 II 27 is not relevant to replacement construction. Partial approval of the tax authority's appeal.
Judgment of January 8, 2026 (9C_440/2024): Direct federal tax and state and municipal taxes 2017 (Lucerne); The present case concerns offsetting in the context of an audit by the tax authorities of a taxable insurance brokerage company, which, due to a lack of cooperation on the part of the taxpayer, resulted in a discretionary assessment. The offsets mainly concerned the transfer of receivables to a related company without compensation. The arguments put forward against this, such as the violation of the right to be heard or the reference to the conformity of the 2017 annual financial statements with commercial law, were not accepted. Dismissal of the taxpayer's appeal.
Judgment of January 26, 2026 (9C_107/2025): VAT 2018-2020; Holiday home owners' association; exclusive rental of a holiday apartment to the sole shareholder; (no) business activity; tax evasion. B acquired the shares in A AG in 2017. Its only (significant) asset is a property in a Swiss ski resort. In 2018 and 2019, substantial investments were made in the property. As a result, B was the sole tenant of the property. He used the property as a vacation apartment. During an audit, the FTA concluded that tax evasion had taken place. A AG was retroactively deleted from the VAT register and the claimed input tax surplus was reclaimed. The Federal Administrative Court dismissed A AG's appeal on the same grounds. The Federal Supreme Court concluded that A AG did not operate a business within the meaning of Art. 10 para. 1bis of the VAT Act and was therefore not subjectively liable for tax. The case law on aircraft owner companies (BGE 149 II 53; see our article of January 8, 2023) was also applicable to vacation home owner companies. Furthermore, there was no reason to object to the lower courts' assumption of tax evasion. A AG's appeal was dismissed.
Judgment of January 27, 2026 (9C_654/2025): VAT 2017-2021; The lower court was right not to hear the appeal due to non-payment of the advance on costs. Dismissal of the taxpayer's appeal.