The case

In Switzerland, the term “non-profit” is not legally protected, i.e. organizations can self-identify as such without formal recognition. However, for an organization to be officially recognized as non-profit, it must obtain tax-exempt status from the cantonal tax authorities, which is the primary objective criterion.

Source: stiftungenschweiz 

The commentary

In order to qualify for tax exemption, an organization must:

  • Pursue Charitable Objectives: The organization must aim to serve the public interest in areas such as social welfare, education, culture, science or environmental protection.
  • Non-Profit Orientation: Activities should not primarily aim to generate profit. Any income should be reinvested into the organization’s mission.
  • No Personal Benefit: The organization’s benefits should not be directed towards its members or founders, so this is the reason why political associations are not considered tax-exempt, BGE 9C_430/2024, 31 March 2025. 
  • Asset Distribution Upon Dissolution: In case of dissolution, any remaining assets must be transferred to another tax-exempt organization with a similar purpose.

Cantonal Variations: Tax exemption is managed on a cantonal level, leading to variations in requirements and practices across Switzerland. Some cantons require several years of activity records while others may accept one or two years. Cantons like Zurich, Aargau, and Bern publish lists of tax-exempt organizations, whereas others, such as Geneva and Nidwalden, do not do so. – Recently, the Canton of Zurich relaxed its practices to allow reasonable remuneration for governing bodies and support activities abroad as well as entrepreneurial support models (impact investments), provided these align with the organization’s charitable purpose.

Some platforms, like StiftungSchweiz, adopt a broader definition of non-profit, including organizations that may not be tax-exempt but still operate with altruistic and non-profit-oriented goals. This approach recognizes the diversity and complexity of the non-profit sector.

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