More time to carry forward losses: The period for offsetting tax losses is extended from seven to ten years
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Legal
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Taxes / Duties
Companies in Switzerland will have more time to claim tax losses. Below, we briefly explain the background and the practical implications.
Dr. Samuel Bussmann
Tax & Legal Partner
Hannah Dobringer
Junior Tax Consultant
Christina Stocker
Tax Counsel
In December 2025, the Swiss Parliament passed the Federal Act on the Extension of Loss Carryforward. Since the referendum period expired on April 17, 2026, without any challenges, nothing now stands in the way of implementation by the Federal Council. The Federal Council must still set the date for the new law to take effect. This should be no later than January 1, 2028.
With this amendment, the legislature is responding to the economic consequences of the pandemic. Companies that have incurred losses in recent years will be able to offset these against future profits over a longer period than previously allowed.
The new regulation applies to federal direct tax as well as cantonal and municipal taxes, although the cantons still need to amend their statutory provisions.
Who is covered by the new regulation?
The extension of the loss carryforward period applies to both self-employed individuals (income tax) and legal entities (profit tax).
The extension to ten years must also be taken into account by companies that have offset losses from foreign permanent establishments against domestic profits. In such cases, losses from a foreign permanent establishment that were previously credited by Switzerland to the Swiss company and taken into account in the permanent establishment country may subsequently lead to taxation in Switzerland within the following ten (previously: seven) fiscal years.
The 10-year period also applies to individuals (self-employed persons) who have offset foreign permanent establishment losses against domestic profits.
Which periods are affected?
It should be noted that this extension applies only to losses incurred starting with the 2020 tax year. Losses incurred prior to the 2020 tax year continue to expire after seven years.
If the fiscal year and the calendar year do not coincide, the closing date of the fiscal year determines which tax period the fiscal year is assigned to.
Example:
For a fiscal year running from April 1, 2019, to March 31, 2020, the loss for this fiscal year is fully allocated to the 2020 tax period. The loss incurred in this 2019/2020 fiscal year is therefore already subject to the 10-year loss carryforward.
Next steps:
We recommend that companies and self-employed individuals review the impact of these regulations on their tax position (including tax accounting). We will be happy to keep you updated regarding the effective date.
Do you have any questions? Our tax team will be happy to assist you.
