On 12 February 2026 the Swiss Federal Supreme Court ruled that Chalet AG, a single‑asset company holding a St Moritz chalet, was used to avoid VAT and ordered repayment of CHF 865,000 in input‑tax credits. The decision clarifies that private‑use assets cannot claim broad VAT input credits and signals stricter scrutiny of form‑over‑substance structures in Switzerland.
It ruled that Chalet AG, a single‑asset company mainly used for private purposes, could not claim broad VAT input‑tax credits and ordered repayment of CHF 865,000.
The decision was made on 12 February 2026.
It signals stricter scrutiny; Swiss VAT authorities can deny or recover credits if the asset is used for private purposes, and audits may focus on evidence of economic activity and fair‑market pricing.
They should document usage, segregate private use, apply fair‑market rents, pro‑rate VAT recovery, and seek advance tax rulings to align structure with real use.
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Le News · 14 days ago
Switzerland’s Federal Council proposes a temporary 0.8‑percentage‑point increase in VAT to raise CHF 31 billion over ten years, aimed at funding a substantial rise in defence spending. The detailed proposal is due in March, with voters expected to decide in summer 2027 and the hike taking effect in 2028.
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