Changes to Swiss VAT Law

Following the 2017 Kreston EMEA Conference we received an update on changes to Swiss VAT Law which we wanted to share with you.

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A revised Swiss Value Added Tax (VAT) Law is expected to be in force as of 1 January 2018. The revision covers a variety of issues, whereby the most significant changes are expected to lead to an additional 30,000 foreign businesses having to register for Swiss VAT.

The revised VAT Law will trigger some significant changes for businesses operating in Switzerland.

Change of the calculation basis of the relevant turnover to evaluate the obligation to register for VAT in Switzerland

The most notable change is the near elimination of the turnover threshold for foreign entities doing business in Switzerland. While the turnover threshold of CHF100,000 (approx. £80,000) per annum will remain in force, the global turnover will have to be included in the calculation basis, effectively resulting in an obligation for any non-established business with a total turnover of more than CHF100,000 annually to register for Swiss VAT from the first taxable turnover generated in Switzerland. Due to differences between Swiss and EU VAT law this could mean that all supplies with Swiss customers fall within the scope of Swiss VAT rather than just the specific transactions that caused the VAT registration obligation.

Change for non established entities supplying low-value goods to Swiss customers

Another amendment impacting foreign businesses is a CHF100,000 (£80,000) threshold which will be introduced for non established entities supplying low-value goods (tax below CHF 5 (£4) per shipment) to Swiss customers. Low-value imports have previously not triggered an obligation for suppliers based abroad to register for Swiss VAT.

With the introduction of the proposed amendment, foreign businesses supplying low value goods at a total of CHF100,000 or more per annum to Swiss customers will be required to register for Swiss VAT, import the goods, and charge Swiss VAT on the sale to Swiss customers. The purpose of the proposed amendment is to ensure that non established online suppliers compete on equal terms with suppliers established in Switzerland.

If you would like more information on how the changes may affect your business, please contact Alison Birch.

Thank you to our Kreston colleague, Dr. Manuel Vogel of a&o Kreston ortag, for producing this article. A copy of the full article can be found here.

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