TF, 01.14.2026, 9C_153/2025
Facts
A foundation with a religious purpose was established on May 3, 2013. On August 16, 2013, the St. Gallen Cantonal Tax Administration (hereinafter: the tax administration) granted it an exemption from profit and capital taxes for cantonal and municipal taxes, as well as for direct federal tax, effective from its inception. On July 6, 2016, the tax administration was informed by its counterpart in Appenzell Ausserrhoden of a potential hidden profit distribution dating back to 2014, made by a limited company owned by the foundation. However, it was not until December 1, 2020, that the tax administration requested documents from the foundation for review. By decision dated November 17, 2021, the tax administration retroactively revoked the tax exemption back to the foundation's inception. The lower cantonal courts annulled this revocation for the 2013 to 2019 tax periods. The tax administration appealed this decision to the Federal Supreme Court.
Legal Analysis
The dispute concerns the legality of the retroactive revocation of a tax exemption for the 2013 to 2019 tax periods. According to case law, a tax exemption decision is not a permanent ruling; the tax authority may re-examine the conditions for exemption for each new tax period. However, the revocation of an administrative decision is limited by the principle of protection of good faith (Art. 5 para. 3 and 9 of the Constitution). This principle protects an individual's reliance on a specific assurance received from a competent authority, provided that the individual could not have recognized its inaccuracy and has taken actions based on this reliance that cannot be reversed without prejudice. Case law (cf. BGE 151 II 581) specifies that the withdrawal of a tax exemption granted tacitly over several years takes effect from the year in which the review procedure for the conditions was initiated. From that moment on, there is no longer a basis to justify the individual's reliance.
Application to the Case
The Federal Supreme Court examined the issue exclusively from the perspective of the protection of good faith, without ruling on whether the substantive conditions for the exemption were still met. The exemption decision of August 16, 2013, constituted a specific assurance from the tax authority upon which the foundation could rely. Although informed in July 2016 of a potential irregularity, the tax administration remained inactive for over four years before opening a review procedure on December 1, 2020. Through this prolonged inaction, the tax administration reinforced the foundation's legitimate expectation that its exemption would be maintained. The foundation could not have detected an error in the authority's position, especially since the authority did not act after becoming aware of the relevant facts. Furthermore, the foundation made financial arrangements (contributions and donations in line with its purpose) while relying on its status as an exempt entity, arrangements that could not be reversed without prejudice. The Federal Supreme Court concluded that the conditions for the protection of good faith were met for the periods prior to the opening of the review procedure. The revocation of the exemption can therefore only take effect from December 1, 2020, i.e., for the 2020 tax period, and not retroactively for the years 2013 to 2019. This reasoning applies to both direct federal tax and cantonal and municipal taxes.
Outcome
The Federal Supreme Court dismissed the tax administration's appeal. The decision of the lower court is upheld, and the foundation's tax exemption for the 2013 to 2019 periods is maintained.
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