Federal Supreme Court, 02.24.2026, 9C_393/2025
Facts
A.________ SA transferred its registered office from the canton of Geneva to the canton of Schwyz in December 2008. Since then, it has been exclusively and regularly taxed in the canton of Schwyz. On February 14, 2018, the Schwyz tax authorities taxed the company on its entire profit for the 2016 tax period.
In January 2018, the Geneva tax authorities conducted an audit at the company's premises, suspecting the existence of an economic nexus (permanent establishment) in Geneva. An internal report was drawn up on February 6, 2018, confirming these suspicions. However, it was not until November 26, 2020, that the Geneva authorities formally opened tax reassessment and tax evasion proceedings against the company. On December 10, 2021, they issued a cantonal and municipal tax bill for the 2016 period, claiming a portion of the company's profit.
A.________ SA's appeals against this taxation were rejected by the Geneva cantonal authorities. The company then appealed to the Federal Supreme Court, primarily seeking the annulment of the Geneva taxation. The canton of Schwyz, a party to the proceedings, argued that the canton of Geneva's right to tax the company for 2016 had expired due to its prolonged inaction.
Legal Analysis
The dispute concerns the application of the principle of the statute of limitations on the right to tax in cases of intercantonal double taxation. According to established Federal Supreme Court case law, a canton forfeits its right to tax a taxpayer if three cumulative conditions are met:
- Knowledge of the facts: The canton claiming the right to tax (the late-taxing canton) knew or should have known the facts justifying its tax claim.
- Late action: The canton delayed asserting its claim. For periodic taxes (such as profit tax), the limitation period is set at the end of the second year following the relevant tax period ("n+2" rule). For the 2016 tax period ("n"), the right to tax therefore expired on December 31, 2018 ("n+2"). Any act aimed at asserting the tax claim (opening proceedings, notification to the taxpayer, etc.) must occur before this deadline.
- Good faith of the first taxing canton: The canton that has already taxed the taxpayer (the first taxing canton) and raises the statute of limitations defense must have acted in good faith. Its good faith is recognized if it could not and should not have known of the existence of the competing tax claim at the time it carried out its own taxation.
This principle aims to protect legal certainty and the trust of the first taxing canton, which should not be forced to refund legitimately collected taxes due to the negligence of another canton. Only a canton, not the taxpayer, may invoke this statute of limitations defense.
Application to the case
The Federal Supreme Court examines the three conditions for the statute of limitations on the canton of Geneva's right to tax for the 2016 tax period.
- Knowledge of the facts by Geneva: The Federal Supreme Court finds that the Geneva tax authorities were aware of the elements capable of establishing their tax sovereignty no later than February 6, 2018, the date the internal audit report was prepared. The first condition is therefore met.
- Late action by Geneva: As the tax period was 2016, the limitation period expired on December 31, 2018. However, the Geneva authorities did not notify the company of their claim until November 26, 2020, nearly two years after the deadline. The Federal Supreme Court rules that the canton of Geneva acted too late, thus fulfilling the second condition.
- Good faith of the canton of Schwyz: The Federal Supreme Court analyzes the situation at the time the canton of Schwyz carried out the taxation, i.e., February 14, 2018. On that date, the company had had its registered office in the canton of Schwyz for nearly ten years and was taxed there exclusively. Nothing in the company's tax returns indicated an economic nexus to Geneva. Consequently, the canton of Schwyz could not and should not have suspected a potential competing claim from the canton of Geneva. The fact that Geneva informed Schwyz of its suspicions in June 2018 is irrelevant, as this information was provided after the taxation carried out by Schwyz. The good faith of the canton of Schwyz is therefore established.
As the three conditions are cumulatively met, the Federal Supreme Court concludes that the canton of Geneva's right to tax A.________ SA for the 2016 tax period has expired.
Outcome
The Federal Supreme Court has upheld the appeal filed by A.________ SA. It has set aside the judgment of the Geneva Court of Justice and ruled that the Canton of Geneva's tax claim for the 2016 period is extinguished due to the statute of limitations. Consequently, the Canton of Geneva is ordered to reimburse the company for any amounts already paid in this regard. The subsidiary claims directed against the Canton of Schwyz have become moot. Legal costs and expenses are to be borne by the Canton of Geneva.
Silex tax newsletter published in collaboration with Anna Vladau, Attorney at Law
