VAT Tax Avoidance: Lessons from the Swiss Federal Administrative Court Ruling A-1146/2023

This ruling addresses VAT tax avoidance, specifically regarding the misuse of input tax deduction through company structures designed solely for private benefit, such as holding vacation properties. The Federal Administrative Court (FAC) determined that if a company’s structure lacks genuine economic purpose beyond tax savings, and results in significant tax advantages, it constitutes tax avoidance. Notably, the court’s approach places a de facto burden on taxpayers to prove legitimate business reasons for such structures, shifting from the traditional requirement for tax authorities to prove abuse.

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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