The Swiss Federal Council resolved that the Federal Act on the Extension of Loss Offsetting enters into force on 1 January 2028.

The key change:

According to the new law, self-employed persons and legal entities can deduct losses from the ten (previously: seven) tax periods preceding the tax period.

Tax periods concerned:

The new law is applicable to losses from and including the 2020 tax period, i.e. losses resulting out of the 2020 tax period can, for the first time, be carried forward for ten years and deducted in the 2030 tax period at the latest.

The extension of the period for loss offsetting aims to enable the offsetting of losses incurred during Covid-19 pandemic.

One important limitation remains:

Despite the extension of the loss offsetting period, losses must always be offset in the earliest tax period possible, and the possibility of offsetting losses is forfeited once an estimated assessment (Ermessenseinschätzung; taxation d’office; tassazione d’ufficio) with a taxable income took place.