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

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

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 & shared bottom lb ros

More from across our site

Tax expert Craig Hillier agrees with the comparison of pillar two to using a sledgehammer to crack a nut
The amount is reported to be up 57% from the £5.6bn that the UK tax agency believes was underpaid in the previous year
The US president also unveiled a new 50% levy on copper imports; in other news, a UK wealth tax proposal has been criticised by the Institute for Fiscal Studies
Wim Wuyts, who had been head of the specialist tax network since 2017, is moving on to a new role with WTS’s Belgian member firm
MNEs are increasingly using algorithmic tools in TP. Sahasranshu Dash argues that data ethics should therefore plug directly into the TP design process
The Institute of Chartered Accountants in England and Wales also queried whether HMRC resources could be better spent scrutinising larger entities
Grant Thornton’s Austria tax head likens his practice to an escape room, shares his football coaching ambitions, and explains why tax is cool
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 EMEA Tax Awards
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 Asia-Pacific Tax Awards
The fates of pillars one and two hang in the balance after the US successfully threw its weight around in G7 and Canadian negotiations
Gift this article