Sale of own shares - New Swiss VAT Federal Court decision

In its decision of 5 October 2021, the Swiss Federal Court ruled that the sale of own shares is to be treated for VAT purposes like a capital contribution and not like a sale of "third-party shares".

A capital contribution (and now also the sale of own shares) does not constitute a service for Swiss VAT purposes. Input tax in connection with a capital contribution, for example on legal consultancy costs and custody costs can be reclaimed entirely or partly from the Swiss VAT Administration in the context of the entrepreneurial activity.

The sale of "third-party" shares still constitutes a VAT-exempt transaction and input taxes in connection with the sale of the securities cannot be reclaimed (except sale of participations ≥10%).

The Federal Court justifies the decision in particular with the newer accounting rules for the recognition of own shares and takes a view from an economic perspective.

Affected constellations:

The following companies / situations may therefore benefit from the Federal Court's decision and now claim additional Swiss input tax on costs in connection with the sale of own shares:

  • Listed holding companies and other companies that buy and sell their own shares to manage their share price.
  • Companies that transfer treasury shares to employees within the framework of employee share participation programmes.
  • Treasury activities with own shares.

In our view, situations involving the ownership of own shares via subsidiaries remain uncertain for the time being.


We recommend checking the current VAT treatment of costs in connection with the sale of own shares in the above-mentioned constellations. We would be happy to support you in this regard.

November 2021 | Author: Roland Reding

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