Swiss VAT : effective and upcoming changes
The value added tax in Switzerland was recently subject to important modifications resulted from the partial revision of the VAT Act.
Validated by the Federal Council in September 2021 and adopted by the Parliament in June 2023, the reform will enter into force in January 2025, with some measures effective since 01/01/2024.
Main changes
1. VAT rates increase since 01/01/2024
According to the federal decree of 17 December 2021 on the additional financing of the OASI (old age and survivors’ insurance), the Swiss VAT rates increased in January 2024:
- Standard rate 7,7% => 8,1%
- Reduced rate 2,5 => 2,6%
- Special rate for accommodation services 3,7% => 3,8%
2. VAT exemptions
VAT exemption was extended on the below goods and services:
- registration fee for participation in cultural events
- travel services retailed by travel agents and related travel agency services
- coordinated care services in connection with medical treatment
- out-patient facilities and day hospitals
- offering of investment groups by investment foundations in frame of OPA and the management of investment groups
- turnover generated by gold and alloys of gold of specific forms
- provision of staff by public authorities to other public authorities
- etc.
3. Electronic VAT registrations and filings
For simplification reasons, the electronic procedures are progressively rendered mandatory:
- 01/01/2024 : mandatory for new businesses & optional for businesses filing returns in paper form
- 01/01/2025 : mandatory for all businesses
4. Annual VAT reporting with instalment payments
Taxpayers with the annual taxable turnover < 5,005,000 CHF can opt for the annual VAT return filing.
The tax will be collected on a provisional basis by paying in instalments that are determined and invoiced by the FTA (Federal Tax Administration).
This new measure is completing the existing filing requirements:
- on a quarterly basis
- on a half-yearly basis (for reporting with net tax rates, if annual turnover < 5,024,000 CHF + annual due VAT <108,000 CHF)
- on a monthly basis (on request of taxpayers with regular VAT credits)
5. Dispense from Swiss tax representation of foreign businesses
Taxable persons without a domicile, or registered office on Swiss territory may be dispensed by the FTA with the appointment of the Local Tax representative if they can provide other guarantees of the fulfilment of their obligations in Switzerland.
6. Dispense from Swiss VAT registration of foreign travel agencies
The place of supply of travel services and related travel agency services being now considered in the country of establishment of the operating agency, the foreign agencies won’t be taxed on their travel operations in Switzerland.
Additionally, the revised VAT act foresees the VAT exemption of travel services retailed by travel agents and related travel agency services. The VAT exemption will also concern the Swiss taxpayers.
7. Transfer of VAT liability on marketplaces
Digital platforms facilitating distance sales of goods in Switzerland will be deemed to be suppliers in relation to purchaser.
The deemed suppliers will be responsible for:
- VAT collection
- VAT returns filing
- VAT payments towards the FTA
- Provision of additional data required by the FTA
Foreign digital platform will have to get VAT registered in Switzerland for accomplishing the above obligations in relation to sales faciliated towards Swiss consumers.
The FTA may order administrative measures against non-compliant businesses after their hearing:
- ban on the import of goods
- destruction of the goods without compensation
- disclosure of the name of non-compliant taxable persons
8. Local reverse charge for domestic supply of carbon emission certificates
The Swiss VAT must be collected by the purchaser of:
- emission allowances
- certificates and attestations for emission reductions
- certificates of origin for electricity and similar rights
which are transferred either by Foreign or by Swiss tax payers.
9. Designation of VAT exempted subsidy by public bodies
Public authority expressly designates funds that it pays to the recipient as a subsidy or as another public law contribution.
In absence of supplies, the subsidy is not considered as consideration, and it’s situated out of scope of the Swiss VAT.
10. Upholding import VAT on industrial products
While the customs duties were abolished on the importation of industrial goods in Switzerland, the import VAT remains due and reportable to the FOCBS (Federal Office for Customs and Border Security) or to the FTA.
Resulting from the amended Customs Tariff Act, the lifting of customs duties came into force in January 2024. It concerns:
- manufacturing inputs : capital goods, raw materials, salt, semi-finished products and machinery
- consumer goods : bicycles, household appliances, clothing and shoes
Agricultural products & fishery products being not classified as industrial products, they are still subject to Swiss Customs duties.
This measure aims to reduce the administrative burdens for businesses and to reinforce the industrial & economic growth.
Context and goals
The recent & upcoming changes in the Swiss VAT Act meet the priorities of the Swiss tax authorities:
- digitalisation and internalisation
- simplifications
- tax reductions
- fight against tax fraud
The amendments of the VAT rates were included into the VAT Act on 01/01/2024.
The non official version of the revised VAT act with upcoming changes was published on 30 November 2023, and it can be consulted under this link.
On October 25, 2023, the Federal Council opened the consultation procedure relating to the partial revision of the ordinance governing value added tax (VAT ordinance). This consultation will end on February 8, 2024.
Our VAT support
BtoBnice will be happy to provide any additional information and tax support in relation to the Swiss VAT Recovery & Compliance for non-established businesses.
Feel free to send your request to contact@btobnice.com or to schedule a presentation meeting with our expert: Teams meeting
