Foreign assignees and Swiss VAT registration – What you should know - Tax Blog

Rec_glb_ho_1834_BLOG

A Swiss VAT number is required and needs to be disclosed when a foreign business intends to send one of their employees to Switzerland on a short-term assignment basis. Although the request for the Swiss VAT number currently only concerns companies active in the construction industry, this may also become mandatory for other foreign companies supplying services or generating a world-wide annual turnover of CHF 100’000 in the future.

In accordance with the bilateral agreement on the free movement of persons, Switzerland hosts foreign employees which are dispatched from any EU-17/EFTA and EU-8 countries for up to 90 days in a calendar year without the need for a work permit. These foreign workers must be registered in advance with the Swiss authorities through an online portal.

All foreign entrepreneurs, which are active in the construction and civil engineering sectors, should be aware that when they assign one of their employees to Switzerland, the employer must register them in advance with the Swiss authorities through an online notification procedure. The Swiss VAT number of the company will be requested during this notification.

We have noticed that the Swiss authorities are keeping a close eye on foreign companies active in the construction industry sending workers to Switzerland. This is one of the many ways of implementing the change in Law, which has entered into force since 1 January 2015. According to this recent change, foreign domiciled companies performing construction and installation services in Switzerland are required to register for Swiss VAT purposes, as soon as their annual turnover on Swiss territory deriving from these supplies of goods, exceeds the threshold of CHF 100’000.

What is next?

The request of the Swiss VAT number on the online portal currently only concerns foreign companies active in the construction industry. In the near future however, it may also become compulsory for foreign companies supplying services in Switzerland (such as IT services) or any other foreign company generating a world-wide annual turnover of CHF 100’000. Indeed, the partial revision of the Swiss VAT Law, planned to enter into force in 2017, foresees that foreign companies should register for Swiss VAT purposes as from the first Franc realised in Switzerland, provided that they generate a global turnover of CHF 100’000/year.

What does it mean for you?

Currently, if foreign companies active in the construction business are not yet registered for Swiss VAT, the online notification tool for short-term assignments requires to answer a certain number of questions to assess if the business is liable to register for Swiss VAT. As these questions are technical VAT-related questions, we would recommend you to contact your local VAT advisor for further assistance.

 

Hody_Blog

Olivier Hody - Partner, Indirect Tax

Olivier has over 17 years’ experience of indirect tax consulting and compliance within Big4 firms in Belgium and Switzerland. He is responsible for the indirect tax team at Deloitte in Geneva, combining this role with being a co-leader of the VAT group within Deloitte Global Tax Center (Europe), managing pan-EU VAT services (in all EU Member States and beyond) for multinational companies. Olivier focuses on Life Sciences & Healthcare, Consumer Business and the Financial Services industry.

Email

Blattner_BLOG

Katharina Blattner - Manager, Indirect Tax

Katharina is an experienced Indirect Tax Manager at Deloitte in Switzerland. Over the last 9 years, she specialised in Swiss and European VAT advisory and assisted foreign-based and Swiss multinational companies dealing with global VAT issues. Her areas of expertise are VAT consulting, planning and reviews across various industry sectors. She has significant experience in restructuring projects (M&A, due diligence) and negotiations with the tax administration.

Email

Comments

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.