Federal Supreme Court, 05.21.2026, 9C_663/2025
Facts
A limited company (the taxpayer), based in the canton of Schwyz (SZ), sold a property located in the municipality of U., canton of Zurich (ZH), on September 30, 2019. This sale generated a real estate capital gain of CHF 3,506,400, on which the municipality of U./ZH levied a real estate capital gains tax of CHF 946,532.80 via a tax assessment notice dated October 5, 2020. This decision has become final. (A.a)
For the same 2019 tax period, the Schwyz tax administration determined a total net profit of CHF 2,484,600, consisting of the Zurich real estate gain and an operating loss of CHF 1,400,664. As part of the intercantonal allocation, Schwyz attributed the entire net profit to the canton of Zurich. This Schwyz tax assessment for 2019 has also become final. (A.b)
During the tax assessment for the 2020 tax period, the Schwyz tax administration denied the taxpayer the right to carry forward the loss incurred in 2019. It took the view that this loss should have been offset against the real estate gain realized in the canton of Zurich in 2019. (A.c)
The cantonal appeals filed by the taxpayer against the 2020 tax assessment in the canton of Schwyz were rejected. At the same time, an application for revision of the 2019 Zurich tax assessment was declared inadmissible by the Zurich authorities, a decision which has also become final. The taxpayer has appealed to the Federal Supreme Court, requesting primarily the annulment of the 2019 Zurich tax assessment and, alternatively, the recognition of the loss carry-forward in the canton of Schwyz for the 2020 period and subsequent years. (B, C)
Legal Analysis
The Federal Supreme Court reiterates the conditions for the admissibility of an appeal regarding intercantonal double taxation. According to case law, a taxpayer may challenge a tax assessment decision from one canton, even if it has become final, within the framework of an appeal directed against a decision from another canton, provided that both decisions concern the same tax period and that the legal remedies have been exhausted in at least one of the cantons. (1.1.1)
The Federal Supreme Court freely reviews violations of federal law, including the prohibition of intercantonal double taxation (Art. 127 para. 3 of the Federal Constitution.). Jurisprudential rules regarding double taxation are treated as federal law, which grants the Court full power of review. Conversely, it only reviews the facts established by the lower court if they are manifestly inaccurate (arbitrary) or based on a violation of the law. (2.1, 2.2, 2.3)
Intercantonal double taxation prohibited by Art. 127 para. 3 of the Federal Constitution exists when:
- a taxpayer is taxed by two or more cantons for the same tax object and during the same period (actual double taxation);
- a canton exceeds its fiscal sovereignty in violation of conflict-of-law rules and levies a tax that belongs to another canton (virtual double taxation);
- a canton subjects a taxpayer to a heavier tax burden solely because they are also linked to another canton (prohibition of discrimination). (3.1)
Application to the specific case
The Federal Supreme Court first examines the admissibility of the taxpayer's claims. The primary and alternative claims, which seek to annul the 2019 Zurich tax assessment decision, are deemed inadmissible. Indeed, the appeal is formally directed against a decision of the Schwyz Administrative Court concerning the 2020 tax period. However, for the 2019 period, no final cantonal decision was rendered, as the tax assessments of both cantons have become final. The jurisprudential condition allowing for the challenge of another canton's tax assessment for the same period is therefore not met. (1.1.2)
Only the alternative claim, relating to the recognition of the loss carry-forward for the 2020 tax period in the canton of Schwyz, is admissible. (1.2)
On the merits, the Federal Supreme Court analyzed whether the refusal by the Canton of Schwyz to allow a loss carryforward in 2020 constituted double taxation. The taxpayer argued that the fact that the 2019 loss was not taken into account in Zurich in 2019, and that its carryforward was subsequently refused in Schwyz in 2020, created double taxation. The Federal Supreme Court rejected this reasoning. It found that for the 2020 tax period, which was the subject of the dispute, there was neither taxation of the same tax object by two cantons nor a conflict of tax sovereignty. The dispute did not concern the same tax object (2020 profit) nor the same tax period (2020 vs 2019). (3.2)
The Federal Supreme Court emphasized that the taxpayer's problem stemmed from the fact that the 2019 tax assessments became final because they were not challenged in a timely manner. Grievances regarding the failure to offset the loss against the real estate gain should have been raised in an appeal against the 2019 Zurich tax assessment. The refusal of the loss carryforward in 2020 by the Canton of Schwyz did not constitute double taxation within the meaning of Art. 127 para. 3 of the Federal Constitution, but was rather the consequence of the 2019 decisions becoming final. (3.2)
Outcome
The Federal Supreme Court dismissed the appeal to the extent that it was admissible. The legal costs, amounting to CHF 6,000, were charged to the taxpayer. (1, 2, 4)
Silex tax newsletter published in collaboration with Anna Vladau, Attorney at Law
