Facts

The International School A., a non-profit association operating a private school in Geneva, requested a tax exemption under Article 56 let. g of the Federal Act on Direct Federal Tax (LIFD). The Cantonal Tax Administration rejected this request, considering that the school was engaged in a predominant commercial activity. The school then appealed against this decision.

The Administrative Court of first instance partially upheld the appeal and granted a partial exemption of 50%. However, the Geneva Court of Justice subsequently rejected the appeal, finding that the school was engaged in a commercial activity that was not subsidiary to its public interest activity.

The school then appealed to the Federal Tribunal by way of a public law appeal, requesting a full tax exemption.

Considerations

The Federal Tribunal rejected the appeal. It considered that the school did not meet the conditions to benefit from a tax exemption under Article 56 let. g LIFD, which provides for the exemption of legal entities pursuing public service or purely public utility purposes.

Although the school had an organization and management similar to that of a public school, several elements were contrary to the recognition of a public service purpose:

  • The school did not offer a complete school education, stopping at the primary level without including the orientation cycle.
  • Its curriculum was only partially recognized by the Department of Public Instruction.
  • The school did not have special support for children…