Switzerland: Swiss VAT changes lead to simplified reporting requirements for foreign businesses
Romy Mueller and Jan Widmer of Deloitte Switzerland explain recent administrative changes which seek to clarify tax liability for foreign investors.
The Swiss Federal Tax Administration (SFTA) has published its practice on how foreign businesses are obliged to report their turnover. An English version of the respective VAT information brochure is also available.
On November 1 2019, the SFTA published the document ‘VAT Info No. 22 Foreign businesses’. The document listed important information regarding the tax, accounting and reporting obligations of foreign businesses that are liable to Swiss VAT.
The practice of the SFTA published in the brochure confirms the following:
Foreign businesses registered for Swiss VAT purposes are no longer obliged to declare their worldwide turnover in its periodical Swiss VAT returns (box 200/221). The scope of turnover to be included in the Swiss VAT returns can be limited to the Swiss turnover only;
There is a suggestion to report worldwide turnover in case VAT is exempt without credit turnover or / and donation are received;
Whether turnover reconciliation can be limited to the Swiss turnover is not specifically mentioned. However, it seems coherent that if no worldwide turnover is reported, this should not become subject to the turnover reconciliation as well and foreign businesses may only need to reconcile the turnover generated on Swiss territory – cf. checklist provided by the SFTA;
Foreign taxable businesses become taxable with their first local supply. In case of advanced payments, the obligation to register for Swiss VAT occurs with the issuance of the invoice or the receipt of the payment.
The above-mentioned points constitute a change in the practice published by the SFTA, which had been generally applicable since January 1 2018, when the revised Swiss VAT law entered into force. In the case where foreign taxpayers have implemented the practice and reported their global turnover in its Swiss VAT returns, this is no longer required and the new changes can be adapted. At the same time, if taxpayers prefer to keep the process and to report the global turnover, this is also possible. An interesting question that arises relates to whether the reporting of global turnovers would necessarily result in a requirement to base the turnover reconciliation on the global turnover as well.
T: +41 58 279 60 00
T: +41 58 279 60 00