The COVID-19 crisis has changed the world just significantly since the beginning of 2020. The Swiss government, as well as the VAT Authorities, have taken actions that aim to support liquidity management for businesses in these challenging times.

COVID-19 affects businesses on all levels, however, immediate challenge and task for most of them are to manage cash and liquidity. During this exercise, many stakeholders acknowledge that VAT can be an important factor and look for respective measures that can be taken. The Swiss government and the Swiss Federal Tax Administration (“SFTA”) have responded to the COVID-19 crisis taken the cash and liquidity demand of taxpayers into consideration. In this alert, we share the measures that have been communicated here and the first experiences with these in the Swiss Deloitte VAT practice.

Measures concerning VAT

1. The interest rate on VAT (Customs & Excise Duties) is reduced to 0.0% between 20 March 2020 and 31 December 2020. Nevertheless, interest on late VAT payments will still be invoiced for tax liabilities occurred outside the aforementioned period.
2. The Federal Financial Administration has officially asked the SFTA to speed up the process of auditing VAT receivables and to pay them out as quickly as possible even though the payment deadline has not been reached. However, this needs to be applied for at the SFTA in particular.
3. From 19 March to 4 April 2020, debtors should not be prosecuted throughout Switzerland.
4. Court holidays are pushed up to 21 March to 19 April 2020.

The SFTA, furthermore, announced that the above rules shall be applied liberally. However, at the same time and as it is not clear yet, how long the overall lockdown measures in Switzerland will last, the SFTA has highlighted that it will continue to work and, thus, all other areas will be served.

Associated questions

The measures announced to raise a number of questions that have partly addressed on the web page of the SFTA. However, there are also a number of items, which have not been made clear so far. In the following, we have addressed the most frequent questions that have reached the Swiss Deloitte VAT practice over the last few days.

Does the SFTA still announce/conduct VAT audit?

The SFTA has stopped on-site audit activities. Thus, taxable persons, for which an audit has been announced, should reach out to the SFTA and clarify next steps, including alternative timing. The SFTA considers conducting the audit of electronically provided documents. However, it remains unclear whether the audit quality will be comparable to an on-site audit and whether such an audit can be finalised.

Can VAT filing be postponed due to COVID-19?

The taxable person can generally apply for a deadline extension for 3 months. However, as the SFTA will generally remain operational and the measures taken target to support cash flow management and should not support filing obligations per se. Thus, the SFTA is reluctant to extend the deadline to more than 3 months, unless based on a single case by case assessment an exception can be made.

What can / needs to be done in case limited cash to settle a payable VAT return is available?

The taxable person can generally apply for a deadline extension for 3 months. In case a longer payment deadline is required a written request needs to be submitted via a form (to be uploaded on the above referenced SFTA webpage) to the SFTA. The respective request can be filed by e-mail or physical mail.

Can the deadline for the VAT Refund Procedure (30 June) be extended as well?

The deadlines for the refund procedure are not extended, hence (to date) a refund procedure request has to be filed still within 6 months following the end of the previous calendar year according to art. 154 Swiss VAT Ordinance.

The entire Deloitte Swiss VAT team collectively thanks our clients to be with us in such challenging times and is, of course, happy to support.

Do not hesitate to consult our news regarding COVID-19 on our website.

If you would like to discuss more on this topic, please do reach out our key contacts below.

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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Tim Reck - Director, Indirect Tax

Tim an Indirect Tax Director based in the Deloitte Zürich office. With over 20 years' experience, Tim is one of the most experienced technical experts known for his work on advising international VAT across the 28 Members of the EU and Switzerland. Tim oversees VAT planning and execution of Swiss based principals trading internationally, from the initial conception of the company through to designing the efficient supply chain, the associated compliance, and ERP implementation. Tim is a Certified German Tax Accountant. He is a member of the VAT competency center of the professional organization for auditors and tax advisors, Expertsuisse. The International Tax Review has listed Tim as an Indirect Tax Leader 2015, 2016, 2017, 2018 and 2019 for Switzerland

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