Input VAT Deduction and (Non-) Entrepreneurial Sphere of Activity: BG Judgement 9C_651/2022

• The right to deduct input VAT is broadly defined under the current VAT Act.
• The distinction between entrepreneurial and non-entrepreneurial activities affects input VAT deduction.
• The Federal Supreme Court dealt with this distinction in judgement 9C_651/2022.
• The case involved an association that organized Christian musicals.
• The association generated income from donations and various services.
• The FTA denied the association an input VAT deduction for the musicals.
• The Federal Supreme Court referred to previous case law on non-entrepreneurial spheres.
• A non-entrepreneurial sphere is characterized by a lack of sustainable income from services.
• The main purpose of the musicals was non-profit or idealistic activity, not income generation.
• The association’s idealistic purpose can be clearly distinguished from its entrepreneurial activities.

Source: primetax.ch

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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