VAT: classification of "Managed Care" services and scope of the exemption for medical treatments (Art. 21 para. 2 item 3 MWSTG) prior to the entry into force of Art. 21 para. 2 item 3bis MWSTG

Federal Supreme Court, 18.03.2026, 9C_331/2024

Facts

A.________ AG, a VAT-registered company, operates integrated medical care facilities within the framework of alternative insurance models for mandatory health insurance ("Managed Care" or HMO models). In this system, policyholders agree to limit their choice of healthcare providers by first consulting a designated health center (the "gatekeeper") in exchange for reduced insurance premiums.

For the 2016 and 2017 tax periods, the Federal Tax Administration (FTA) claimed an additional VAT payment of CHF 1,104,579 from A.________ AG. The FTA determined that the remuneration received by A.________ AG from health insurers under framework agreements for its "Managed Care" services was subject to VAT. These agreements stipulate that A.________ AG commits to providing coordinated medical care, supporting the insurers' cost-containment measures, and fulfilling various information and documentation obligations. In return, it receives remuneration consisting of flat fees and performance-based components, calculated in particular on the basis of healthcare cost savings achieved compared to a control group.

After its objection was rejected by the FTA, A.________ AG appealed to the Federal Administrative Court, which also dismissed its appeal. A.________ AG then appealed to the Federal Supreme Court, requesting the annulment of the decision and a reduction of its tax debt by CHF 956,389.

Legal Analysis

The dispute concerns whether the "Managed Care" services provided by the appellant in 2016 and 2017 constitute "medical treatments" within the meaning ofArt. 21 para. 2 item 3 of the VAT Act (VAT Act), and are therefore exempt from tax. According to this provision, treatments in the field of human medicine performed by doctors or healthcare professionals authorized to practice are excluded from the scope of the tax.Art. 34 para. 1 of the VAT Ordinance (VAT Ordinance) defines medical treatments as the diagnosis and treatment of illnesses, injuries, and other health disorders, as well as preventive activities.

The Federal Supreme Court reiterates that VAT exemption cases, which deviate from the principles of tax universality and competitive neutrality, must be interpreted restrictively.

A central element of the analysis is the introduction, on January 1, 2025, of Art. 21 para. 2 item 3bis of the VAT Act. This new provision specifically exempts "coordinated care services in relation to medical treatments." The Federal Supreme Court examines the history of this legislative amendment (resulting from the Humbel motion 19.3892), which aimed to correct a situation deemed "absurd" where coordination efforts aimed at reducing healthcare costs were penalized by VAT.

However, the Federal Supreme Court emphasizes that, according to its case law, a new law cannot be applied retroactively to govern facts prior to its entry into force. While the preparatory work for a new law may shed light on the interpretation of the old law, it cannot alter its normative content. The very fact that the legislature deemed it necessary to create a new specific exception for coordinated care indicates that these services were not considered to be covered by the previous concept of "medical treatments."

Finally, for a service to be subject to VAT (or exempt from it), there must be an exchange of services, i.e., a sufficient and direct causal link between the service provided and the consideration (remuneration) received.

Application to the case at hand

The Federal Supreme Court conducts a multi-step analysis to determine whether the appellant's "Managed Care" services for the years 2016 and 2017 are exempt.

1. Distinction of services: The Court distinguishes between direct medical treatments provided to patients (billed, for example, via TARMED), which are indisputably exempt under Art. 21 para. 2 item 3 of the VAT Act, and "Managed Care" services remunerated globally by insurers via framework agreements. The dispute concerns only this second category.

1. Non-retroactivity of the new law: The Federal Supreme Court rejected the appellant's argument that the new provision (Art. 21 para. 2 item 3bis MWSTG) merely clarified the original intent of the legislature. It held that the creation of a new exemption rule demonstrates, on the contrary, that the previous law did not cover these services. Applying the new exemption to the years 2016-2017 would amount to an unauthorized retroactive application of the law.
2. Classification of services under the previous law: The Court examined the nature of "Managed Care" services with regard to the definition of "medical treatment" (Art. 21 para. 2 item 3 MWSTG).
   1. Services of an institutional and organizational nature (system implementation, collaboration with third parties, cost-containment measures, documentation) are clearly not direct medical treatments provided to a patient and therefore cannot be exempted under the previous law.
   2. Regarding coordination services linked to an individual case (e.g., patient management within the "treatment chain"), the Federal Supreme Court left open the question of whether they could, by their nature, be classified as "medical treatment."

1. Absence of a direct exchange of services: The Federal Supreme Court decided the matter on other grounds. It found that the remuneration paid by insurers (flat fees and performance bonuses) does not compensate for specific, identifiable coordination acts provided to a given patient. Rather, it is a global payment for the appellant's general commitment to provide and operate a coordinated care system for a group of insured persons. There is therefore no direct causal link or equivalent relationship between a concrete coordination service and the consideration received. This lack of a direct exchange of services precludes exemption, even if some of the activities could be classified as medical treatment.

In conclusion, "Managed Care" services invoiced to insurers in 2016 and 2017 do not meet the exemption requirements of Art. 21 para. 2 item 3 MWSTG.

Outcome

The Federal Supreme Court dismissed the appeal by A.________ AG. It confirmed that "Managed Care" services provided during the 2016 and 2017 tax periods are subject to VAT, as they cannot be classified as "medical treatments" within the meaning of the law in force at the time, and the new exemption under Art. 21 para. 2 item 3bis MWSTG is not retroactively applicable. The appellant is ordered to pay the court costs.

Silex Tax Newsletter published in collaboration with Anna Vladau, Attorney at Law