Requirements for the tax exemption of a foundation

If foundations pursue public, charitable, or religious purposes, they can be exempted from federal, cantonal, and municipal taxes.

Requirements for Tax Exemption

If a foundation wishes to apply for a tax exemption, it must submit a request to the cantonal tax administration. For the request to be recognized, the foundation must pursue public, charitable, or religious purposes according to its statutes. The corresponding activity must also be actually carried out. A tax exemption will not be recognized if the foundation has a corresponding purpose but does not implement it. It is up to the foundation alone to prove that it meets the requirements.

1. Public Purposes

• Fulfillment of a public task that would otherwise be carried by the community.
• The transfer of the task to the foundation must be based on a public law act.

2. Charitable Purposes

• The circle of recipients of the service must be as open as possible.
• Economic activities serving earning purposes are not accepted.
• The foundation must pursue charitable purposes, i.e., the activity must be in the public interest. This is the case, for example, with charitable or health-promoting activities.
• There must be no self-help purposes.

3. Religious Purposes

• A religious purpose is regarded as the care or promotion of a common belief in teaching and worship at the cantonal or nationwide level.
• Beliefs that are significant in the area of Switzerland are considered nationwide.

A partial tax exemption may be considered if, in addition to a charitable purpose, other purposes are pursued.

Extent of Tax Exemption

The foundation is exempt from direct federal tax (profit tax) and cantonal and municipal taxes (profit and capital tax, inheritance and gift tax). Depending on the canton, the exemption from real estate transfer tax and property gains tax may apply.

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