Switzerland VAT

27 December 2012 update

Switzerland is not part of the European Union, or EU VAT Compliance regime, and as such is free to set its own VAT rules and rates. However, it does follow much of the detail of the European VAT Directives to encourage free trade with the 27 EU member states.

Swiss VAT was introduced in 1995. It is known as Mehrwertsteuer (MWST); Taxe sur la valeur ajoutée (TVA); Imposta sul valore aggiunto (IVA). While Switzerland is not part of the EU, its VAT regulations have followed the EU template in terms of all the fundamental principles. Revisions were made in January 2010.

Click here if you would like free guidance on Swiss VAT compliance - including fiscal representation

 

Requirement to register for Swiss vat

For foreign companies making taxable supplies in Switzerland, there may be a statutory obligation to register for VAT. This includes the ongoing compliance requirements to file periodic tax returns and pay over any VAT due to the Swiss tax office.
Typical situations requiring a Swiss VAT registration include:

  • Where goods are delivered within Switzerland;
  • If the foreign trader imports, installs or assembles goods in Switzerland;
  • Export of goods from Switzerland;
  • Supplies of services, where the place of supply is determined as being in Switzerland e.g. land & property related services

 

 

Swiss VAT registration threshold

There is an annual VAT registration threshold of CHF 100,000. It is not compulsory to register if your annual sales turnover is below this amount, but companies can opt to do so, in order to be able to recover Swiss VAT suffered e.g on Imports or Swiss purchases.

Swiss VAT Registration

A foreign company may register for VAT without the requirement to form a local company; however they must appoint a local Swiss VAT Representative. In addition following the submission of the VAT registration application, the Swiss tax office stipulates a local bank guarantee is provided or a monetary deposit, prior to the issue of the number.


Swiss VAT compliance

The Swiss VAT law followed the EU model since its inception and effective January 1st, 2010; it was re-aligned with the new EU VAT package rules implemented on the same date throughout all EU states. The place of supply of services rules, for example, was changed. The place of supply for VAT purposes is designated as being where the recipient of the services is based, but with exceptions for land & property services and personal services. In addition, rulings on VAT deduction were relaxed e.g. VAT on restaurant expenses can be wholly claimed, whereas before it was only 50%.


VAT Rates in SWITZERLAND

The standard VAT rate in Switzerland is 8% since January 2011. There is a special rate of 3.8% for accommodation services. There is also a reduced 2.5% rate for: food, water, agricultural & medical products, newspapers, magazines, books and some cultural services.

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swiss vat returns

Periodic VAT returns must be submitted by all companies with a Swiss VAT number, detailing all taxable supplies (sales) and inputs (costs). Generally, returns are submitted quarterly. VAT returns are due before the deadline of 60 days after the reporting period end. Payments of any associated VAT liability must be paid by the return deadline.

In the case of a tax credit (where the VAT incurred by the company exceeds the VAT charged on its sales in the reporting period), approved credits will be paid over to the company within 60 days. In the case of the company’s VAT account continuously being in credit, it is possible to apply to be permitted to submit monthly rather than quarterly returns.


Swiss vat recovery

It is possible for foreign businesses to apply for a VAT refund in Switzerland, along the lines of the European Union’s 8th & 13th VAT Directives. The following conditions should be fulfilled for a foreign business to recover VAT refunds in Switzerland:

  • the company is not liable to be VAT registered in Switzerland;
  • the VAT is concerned with the applicant’s business activities;
  • original invoices showing Swiss VAT can be provided.; and
  • the company is in a country with whom Switzerland businesses have a reciprocal right of VAT recovery.
  • Claims to recover VAT are submitted in the January to June window period following the year of claim e.g. 2010 dated invoices would be submitted for reclaim between January and June 2011.


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How TMF VAT can help in Switzerland

TMF can help ensure non-resident companies are fully compliant for Swiss VAT, and are able to keep any cash flow impact to a minimum. With local professionals on the ground in Switzerland, TMF is in regular touch with the tax office, meaning it is often able to get the best settlement possible on behalf of its clients.
VAT services that TMF provide in Switzerland include:

  • Full Fiscal Representation service;
  • Registering companies with the tax authorities;
  • Up-to-date guidance on VAT compliance regulations, including invoicing formats and exchange rate conversion rules; VAT filings and payments;
  • Organising repayments of VAT credits; and Liaising with the tax authorities, and fielding any queries or tax audits.

 

To learn more about TMF VAT Co-ordination, contact us:

Click here if you would like free guidance on Swiss VAT compliance - including fiscal representation

enquiries@tmf-vat.com

+44 (0)870 067 8881

 

 
 
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