News Taxes

Tax loss carryforward: Extended from seven to ten years as of 2028

Under current law, tax losses can only be offset against profits of the following seven financial years. Loss carryforwards that had not been used by then expired without replacement. This applies to companies for profit tax purposes as well as for self-employed individuals for income tax purposes, for both direct federal tax and for cantonal and communal taxes.

The Federal Act on the Extension of Loss Offsetting was adopted by Parliament and will be put into force by the Federal Council as of 1 January 2028. Losses can therefore be offset over a period of ten years in future. The longer period applies to losses from the 2020 tax period onwards, thus also covering losses incurred during the Covid years. The closing date of the financial year is decisive. A loss from 2020, which previously could be offset for the last time in 2027, can therefore now be used until 2030. The seven-year period continues to apply to older losses.

At the same time, for direct federal tax, the period within which Switzerland may reverse the deduction of losses of foreign permanent establishments, if these losses are subsequently offset abroad, is also extended to ten years.

We recommend reviewing existing loss carryforwards from 2020 onwards and retaining the respecting records until the losses have been fully offset, as losses are only examined at the time of offset.

For individual advice or further information, please contact our corporate tax team Remo Merz, remo.merz@fineac.ch and Jan Blattmann, jan.blattmann@fineac.ch

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