Facts
The A. - Foundation B. (Foundation B.) operates a cultural center in U./SZ. It partially provides services that generate revenue (rental of premises, museum operation with a cafeteria, etc.), but is largely financed through donations and investment income. From February 2009 to Autumn 2010, the building was renovated, during which time the foundation generated hardly any turnover. The Swiss Federal Tax Administration (ESTV) took the view that Foundation B. was not subject to value added tax for the years 2010 and 2011, as it did not engage in any commercial activity. Foundation B. then filed a complaint, and the Federal Administrative Court ruled in its favor. The ESTV appealed against this judgment.Considerations
The Federal Supreme Court decided that Foundation B. should indeed be considered as engaged in commercial activity and therefore subject to value added tax. Although the fees generated accounted for only 4.4% and 9.9% of the total expenditure in the disputed years, these were not to be considered merely symbolic. The fact that Foundation B. had previously been treated as…