Tax montage – or when playing with fire burns your fingers

The taxpayer is a Swiss company whose purpose is the management of holdings, properties, and other assets. The company's sole asset is a chalet used as a second home by its Director. The Director and their family are the sole users of the property. When construction work on the chalet began, the taxpayer registered in the VAT register. The taxpayer reclaimed the input VAT on the works.

The tax authorities are conducting an inspection. They are retroactively removing the taxpayer from the register of taxable persons and reclaiming the input tax. In substance, the tax authorities consider the established structure to be tax evasion solely for the purpose of recovering the input tax (CHF 865k).

The federal judges refer to their case law concerning VAT on private aircraft (ATF 149 II 53):
1️⃣ is the taxpayer subjectively liable for tax and
2️⃣ to what extent could his performance be considered a commercial activity giving entitlement to the deduction of input tax
and apply mutatis mutandis to property companies owning holiday homes (recital 4.1).

According to federal judges, there is no commercial activity where the company is used to satisfy the private needs of the ADE or their relatives. This applies to companies that own private jets as well as property companies that own holiday homes.

The judgment is in German.

TF, judgement 9C_107″ 2025, of 26 January 2026