Federal Supreme Court, 09.12.2025, 9C_522/2025
Facts
An association (the appellant) organizes a series of tennis tournaments on a national scale. Following an audit, the Federal Tax Administration (FTA) determined that the association was the primary service provider for this tournament series. Consequently, the registration fees paid by the players were to be attributed to it. As the organization of sporting events is a service excluded from the scope of VAT, the FTA made an input tax correction of CHF 79,500 for the 2015 to 2019 tax periods. The association's appeals against this decision were rejected in turn by the FTA and the Federal Administrative Court. The association has now appealed to the Federal Supreme Court.
Legal Analysis
The dispute concerns the attribution of the service within the meaning ofArt. 20 VAT Act. According to the principle set out in Art. 20 para. 1 of the VAT Act, a service is deemed to be provided by the person who acts in their own name vis-à-vis third parties (external appearance). The exception is direct representation (Art. 20 para. 2 VAT Act): if a person acts clearly in the name and on behalf of a third party (the principal), the service is deemed to be provided by the latter. To this end, the representative must prove the existence of a representation relationship and expressly communicate it to the recipient of the service, or this relationship must clearly emerge from the circumstances. The assessment is based on objective criteria.
Application to the case
The Federal Supreme Court (FSC) first analyzes the nature of the service provided in exchange for the registration fee. It concludes that players are not paying for a simple court rental or a local tournament, but to participate in a nationally significant competition that is centrally organized and coordinated. Applying Art. 20 para. 1 of the VAT Act, the FSC finds that it is the association that appears externally as the organizer and primary service provider for this tournament series. It coordinates the event, selects the venues, manages sponsors, establishes rankings, distributes prizes, and sets the rules. The role of local tennis centers is secondary, limited essentially to providing the infrastructure. The FSC rejects the association's argument that it acts merely as a booking platform or direct representative of the tennis centers. Its role goes far beyond that of an intermediary. Furthermore, the representation relationship is not communicated to the players. The fact that registration fees are, according to the regulations, paid directly to the tennis centers is considered a mere collection procedure that is insufficient to establish a direct representation relationship from an objective standpoint. The comparison with online booking platforms is dismissed because, unlike them, the association does not present itself as a mere intermediary. There is therefore no violation of the principle of equal treatment (Art. 8 of the Constitution). Internal arrangements and the accounting of amounts are irrelevant to the application of Art. 20 of the VAT Act, which is based on external appearance.
Outcome
The Federal Supreme Court concludes that the registration fees must be attributed to the association. As this service is excluded from the scope of VAT, the input tax correction made by the FTA is justified. The association's appeal is rejected.
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