- 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.
