Federal Administrative Court Clarifies VAT Law on Participation in Business Activities

• In Switzerland, the acquisition, holding, and sale of participations is considered a business activity for VAT purposes
• A participation is defined as shares in the capital of other companies held with the intention of permanent investment and conveying significant influence
• The Federal Administrative Court clarified that a 10% shareholding is considered a participation, but holdings below 10% require evidence of significant influence
• The court ruled that a loan does not constitute a qualified participation for VAT purposes
• The decision emphasized the need for evidence of significant influence in determining a qualified participation

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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