Switzerland: Many more foreign-domiciled suppliers VAT liable from January 1 2015
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Switzerland: Many more foreign-domiciled suppliers VAT liable from January 1 2015

suter.jpg

rodak.jpg

Benno Suter


Tomas Rodak

The Federal Ministers have concluded that pursuant to the new article 9a of the Swiss VAT Ordinance the general VAT exemption for foreign entities exclusively rendering services and goods that are subject to VAT reverse charge becomes limited to rendering of services only. Since installation, repair, maintenance and leasing, for example, qualify from a Swiss VAT perspective as a supply of goods, many foreign domiciled suppliers doing business in Switzerland have to thoroughly consider their obligation to register for VAT purposes in Switzerland if they generate annual turnover of more than CHF 100,000 with such supplies.

Although this new rule concerns predominantly small, non-Swiss resident craftsmen doing business in Switzerland and in the principality of Liechtenstein, multinational entities might also be affected. Since Switzerland applies a kind of VAT force of attraction, all rendered services of a foreign domiciled entity have to be taxed instead of applying the reverse charge obligation of the buyer once the supplying entity is Swiss VAT registered. No change is foreseen for foreign entities providing telecom or electronic services to Swiss or Liechtenstein resident customers (B2C). All foreign entities rendering such B2C services of more than CHF 100,000 a year must still be VAT registered in Switzerland. Furthermore, a revision of the Swiss VAT Law is on its way and is projected for January 1 2016. This revision defines the VAT registration threshold of CHF 100,000 no longer as Swiss but rather as global turnover that will oblige even more multinational entities to register for VAT purposes in Switzerland. The de-minimis rules for the importation of small goods are also under the scrutiny of the planned revision. If those de-minimis exemptions fall, even more foreign entities will have to register in Switzerland for VAT purposes from January 1 2016. Foreign domiciled entities with no domestic presence need to appoint a Swiss domiciled fiscal representative and have to consider their obligations as VAT payers.

Benno Suter (bsuter@deloitte.ch) and Tomas Rodak (trodak@deloitte.ch)

Deloitte

Tel: +41 58 279 63 66 and +41 58 279 63 64

Website: www.deloitte.ch

more across site & bottom lb ros

More from across our site

KPMG Netherlands’ former head of assurance also received a permanent bar and $150,000 fine; in other news, asset management firm BlackRock lost a $13.5bn UK tax appeal
The new, fully integrated office will also offer M&A, dispute resolution, IP and corporate tax services
The new guidance concerns a recent 1% excise tax on the repurchases of corporate stock for both US and certain foreign companies
Interpath has hired a managing partner from rival accounting firm BDO to lead the new operation
Survey results of over 28,000 in-house lawyers reveal that American in-house counsel place a higher value on the reputation of external advisers than their peers elsewhere
In an exclusive interview with ITR, Andrew Leigh also endorsed new legislation designed to prevent multinationals using complex corporate structures to reduce taxes
The finalists for the 13th annual awards revealed
Nick Crama and Parwesh Bissumbhar, senior director and manager respectively at Alvarez & Marsal, outline practical advice for real estate managers to comply with DAC6 regulations
Survey results of over 25,000 in-house lawyers show competitive pricing and transparency in billing practices can help firms win clients
The new tech partnership will assist clients worldwide with pillar two; in other news, UK accountancy firm MHA completes a regional merger
Gift this article