In connection with the pandemic, Parliament has decided to extend the carry-back of losses from 7 to 10 years. This is intended to give affected companies a better opportunity to recover. Parliament passed a corresponding law in December 2025. The referendum deadline has now expired after 100 days on 17 April 2026. Consequently, the law will come into force at the latest on 1 January 2028 (the Federal Council will still define the date).
Who is this extension valid for?
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- Legal entities: Profit tax (direct federal tax and cantonal and communal taxes)
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- Self-employed individuals and income tax
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- Companies which have offset losses from a foreign permanent establishment against domestic profits.
This extended loss carry-back is applicable for loss carry-backs from the tax period 2020 onwards. Earlier losses continue to be subject to the 7-year loss carry-back.
Our assessment
This innovation not only benefits companies that have suffered from the pandemic but also supports start-ups, which normally incur losses in their early years. With this extension, Switzerland also aligns itself with numerous European countries that do not have a limitation on loss offsetting.
This measure is a clear sign of strengthening Switzerland as a business location.
