The Swiss Federal Tax Administration has published its practice on how foreign businesses are obliged to report their turnover – an English version of the respective VAT–Info Brochure is now available as well.

What is important as of 1 January 2020

On 1 November 2019, the Swiss Federal Tax Administration (“SFTA”) published its final VAT-Info Brochure No. 22 “Foreign Businesses”. In this VAT reporting obligations of foreign businesses that are liable to Swiss VAT and, thus, registered for Swiss VAT purposes are addressed.

The practice of the SFTA published in VAT-Info Brochure No. 22 confirms the following:

• Foreign businesses registered for Swiss VAT purposes, are no longer obliged to declare their worldwide turnover in its periodical Swiss VAT returns (box 200/221). The scope of turnover to be included in the Swiss VAT returns can be limited to the Swiss turnover only;
• Suggestion to report worldwide turnover in case VAT exempt without credit turnover or / and donation are received;
• Whether the turnover reconciliation can be limited to the Swiss turnover as well is not specifically mentioned. However, it seems coherent that if no worldwide turnover is reported this should not become subject to the turnover reconciliation as well and foreign businesses may only need to reconcile the turnover generated on Swiss territory – cf. checklist provided by the SFTA;
• Foreign taxable businesses become taxable with their first local supply. In case of advanced payments the obligation to register for Swiss VAT occurs with the issuance of the invoice or the receipt of the payment respectively.

The above mentioned points constitute a change in the practice published by the SFTA generally applicable since 1 January 2018, when the revised Swiss VAT Law entered into force. In case foreign taxpayers have implemented the practice and reported their global turnover in its Swiss VAT returns this is no longer required and can be adapted. At the same time if it is preferred to keep the process and to report the global turnover this is possible as well. The interesting question arising then is, however, whether reporting of global turnover would be necessarily result in a requirement to base the turnover reconciliation on the global turnover as well.

Last but not least it should not be missed to underline that the SFTA took the effort and released the VAT-Info Brochure No. 22 in English as well.

The Deloitte Indirect Tax Team will be happy to enter in a more detailed discussion and to pick up any questions you may have. Please do reach out to one of the key contacts below. We would be happy to support.

Key Contacts

Romy Mueller - Director, Indirect Tax

Romy Mueller is an Indirect Tax Director in the Business Tax practice of Deloitte Switzerland assisting clients with Swiss as well as International Indirect Tax matters, such as VAT, Customs & Excise Duties. In addition to that Romy has a focus on Tax Technology as well as Tax Management Consulting supporting clients with ERP implementations and automation of VAT compliance processes. Romy started her career in the Big4 environment 14 years ago and has extensive expertise in providing VAT advisory & compliance services to national and international clients. She is currently a member of our Swiss outbound team, serving Swiss based multinationals and European headquarters with a focus on business model transformation. Romy regularly teaches Master Classes for VAT and Direct Tax at Swiss Tax Law School (Kalaidos Fachhochschule). She is a German lawyer and holds a Post Academic Master’s degree in International VAT.

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Jan Widmer- Manager, Indirect Tax

Jan Widmer is an Indirect Tax Manager within Deloitte Switzerland with more than 6 years of experience in the national in international VAT law landscape. He is advising clients on advisory and compliance related topics cross industries, supply chain structuring and optimization projects, tax due diligences, real estate acquisitions and disposals and VAT audits.

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