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

Overview of the tax law decisions of the Swiss Federal Administrative Court published between July 13 and 19, 2026:

Judgment of June 19, 2026 (A-5250/2025): Withholding tax; The issue in this case is whether the withholding tax claims against the company regarding the 2015–2019 dividends (for the fiscal years 2014–2018) in the amount of CHF 217,000—noting that the withholding tax on the 2015 dividend (fiscal year 2014) became time-barred during the preliminary proceedings—may be asserted by the appellant pursuant to Art. 12 VStrR. It is further disputed whether the appellant, as a result of the de facto liquidation of the company in 2020, also owes additional withholding taxes in the amount of CHF 149,589.69, likewise pursuant to Art. 12 VStrR. After a thorough review, the Federal Administrative Court concludes that the FTA is correct in demanding that the complainant pay withholding tax on the 2015–2018 dividends in the amount of CHF 210,000 plus late payment interest pursuant to Art. 12(2) of the Administrative Offenses Act (VStrR). Nor is there any basis for objecting to the assumption of a de facto liquidation as of the end of February 2020; the requirements for the obligation to pay under Art. 12(2) of the VStrR are also met in this respect. The appeal is dismissed.
Judgment of July 1, 2026 (A-2267/2022): Withholding Tax (Refund); The issue in dispute is whether A. AG is entitled to a refund of the withholding tax at issue. In this regard, it must be examined in detail whether, as the direct recipient of the dividends received, it is the beneficial owner. If the actual beneficial ownership is affirmed, it must be examined whether tax evasion can be assumed. As demonstrated, a legal entity is entitled to a refund of withholding tax on income from movable capital assets if—in addition to the right of use—it had its registered office in Switzerland at the time the taxable payment became due (Art. 24(2) VStG) and properly recorded the income subject to withholding tax as revenue (Art. 25(1) VStG a contrario). It is undisputed that A. AG had its registered office in Switzerland at the time the taxable payment became due, and it must be assumed that it correctly recorded the dividends. Nor has the right to a refund been extinguished under Art. 32(1) VStG. The lower court argues that the new, clarified Federal Supreme Court case law—since it was issued in the context of international relations—cannot be applied uncritically to the present domestic case. However, this question need not be further addressed, as all criteria for tax avoidance are met. In summary, A. AG had the right of use with respect to the “calendar spreads” at issue, at least under the clarified law. Under the previous law, the right of use would likely have been denied. With regard to the “shares with put options,” according to previous Federal Supreme Court case law, the right to use the dividend income would likely be granted to A. AG, and under the clarified case law, this right would be affirmed. Based on the foregoing, all criteria for tax avoidance are met. Overall, the lower court therefore correctly denied A. AG a refund of the withholding tax with respect to both transactions.‍
Judgment of July 6, 2026 (A-7500/2024): Value-Added Tax (tax period 2019; input tax deduction on demolition costs and contaminated site remediation); The issue in dispute was how “previous use” is defined and which “time frame” should be taken into account in this regard. Although the property in question was used by the then-appellant for seventeen years, she opted to have it taxed only for the last three years prior to demolition. The right to deduct input tax on demolition and contaminated site remediation costs must be based on the property’s prior use if the demolition of the property and the remediation of the contaminated soil are carried out by the previous owner (so-called “look back” approach). However, if a change of ownership occurs prior to the demolition and remediation, the future use of the property must be taken into account—even if there is interim use. According to the highest court’s case law, the decisive factor for the VAT treatment of demolition and contaminated site remediation costs is thus, as a first step, whether a change of ownership takes place in connection with them. The appellant, A. AG, considers this case law—which is based solely on the criterion of a change in ownership—to be too rigid, as it fails to take other factual elements into account and could lead to objectionable results. Overall, A. AG does not present any further grounds for departing from the relevant case law. Overall, the temporary use at issue here has no independent significance in the sense that, at the time of demolition, A. AG would be in the “demolition” phase (final phase) and not in the “construction” phase (first phase). Based on the foregoing, the appeal must be dismissed in its entirety.

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