Swiss Federal Supreme Court, 09.04.2026, 9C_668/2025
Facts
Until the end of 2018, A.________ AG benefited from the privileged tax status of a holding company in the canton of Schwyz. This status exempted it from corporate income tax. During the 2018 financial year, it incurred a loss of CHF 1,549,727.
In 2019, as part of the Federal Act on Tax Reform and AHV Financing (TRAF), which abolished privileged tax statuses, the company voluntarily switched to ordinary taxation.
For the 2020 tax period, the company reported a profit of CHF 2,076,073. It attempted to offset this profit against losses incurred in 2018 and 2019 to reduce its taxable profit to zero. The Schwyz cantonal tax administration refused to allow the offset of the 2018 loss. It argued that this loss was incurred while the company still held holding status, a tax regime under which profits were not taxed.
Consequently, a loss incurred under that regime could not be carried forward to reduce a profit realized under the ordinary taxation regime. The company challenged this decision up to the Cantonal Court of Schwyz, which upheld the tax administration's position. The company then appealed to the Federal Supreme Court.
Legal Analysis
1. Principle of non-offsetting of losses between different tax regimes
General principle: Swiss tax law is governed by the principle of symmetry.
- Losses can only be deducted if the corresponding profits would have been taxable.
Holding status case: Under the former law, a holding company was exempt from corporate income tax.
Since its profits were not subject to tax, losses incurred during that period are, by symmetry, not deductible from future profits realized after a transition to ordinary taxation.
- This principle is universally recognized and is not contested in substance by the parties.
2. Change of status and administrative practice (Praxismitteilung)
- In the context of the TRAF, the Schwyz tax administration published a circular (Praxismitteilung) explaining the transition procedures.
- This circular offered holding companies the option to request an early change of status for the 2018 tax year.
Such a change, had it been requested, would have allowed the company to be considered subject to ordinary taxation as of 2018.
- Consequently, the loss incurred in 2018 would have been tax-recognized and could have been carried forward to offset the 2020 profit.
3. Principles of good faith and equal treatment
- A tax authority does not violate the principle of good faith if it applies a clearly communicated practice.
- The principle of equal treatment is only violated if identical situations are treated differently without an objective reason.
Application to the specific case
The Federal Supreme Court rejected the appellant company's arguments point by point:
Regarding the 2018 status:
The company claimed to have been taxed under the ordinary regime starting in 2018.
- The Federal Supreme Court dismissed this argument, noting that the 2018 tax assessment decision explicitly mentioned "taxation as a holding company" and that the company itself had requested this status in its tax return.
- The fact that the profit tax was zero due to the loss does not change the nature of its tax status that year.
Regarding the violation of good faith and equal treatment:
The company argued that it should have been able to benefit from the advantages of the administrative circular, even without having formally requested the early change of status.
- The Federal Supreme Court ruled that there was no unequal treatment, as the situation of the appellant, which did not request the change, was not comparable to that of a company that had requested it.
- There was no violation of good faith.
- The circular was published in July 2019, before the 2018 tax assessment was finalized in September 2019.
- The company therefore had ample time to become aware of this practice and to file a request for a change of status, which it failed to do.
- The tax authority had no constitutional obligation to inform each company individually of this possibility.
The company failed to request the early change of status in 2018. It must therefore bear the consequences of this omission. The 2018 loss was incurred under an exemption regime and therefore cannot be used to reduce the taxable profit of 2020, which was earned under an ordinary tax regime.
Outcome
The Federal Supreme Court has dismissed the appeal. The tax authority's decision is upheld. The 2018 loss of CHF 1,549,727 cannot be deducted from the 2020 profit.
Legal costs of CHF 6,500 are to be borne by the appellant company.
Silex tax newsletter published in collaboration with Anna Vladau, Attorney at Law
