Switzerland’s revised VAT regime to enter into force in 2018

by Davide Anghileri

The partial revision of Switzerland’s Value Added Tax Act will come into force on 1 January 2018, the Federal Council determined 2 June.

Under the new regime, to become VAT liable, global turnover should be taken into account instead of just Swiss turnover. Therefore, companies whose global turnover is at least 100,000 CHF will be liable to VAT from the first franc of turnover in Switzerland.

The aim of this provision (article 10) is to eliminate the VAT-related competitive disadvantages for domestic companies and activities, especially in the border regions.

Other minor changes in the new legislation, like reduced VAT rate for electronic newspapers, magazines, and books; margin taxation for collectors’ items; and others will enter into force on 1 January 2018.

The Federal Council also decided that the new regime regarding mail-order will not come into force until 1 January 2019, as Swiss Post needs more time to implement the statutory provisions for technical reasons.

Under this regime, the customers will no longer have to pay the taxes and fees levied by Customs upon importation, but it will be a duty of the mail-order companies to bill customers for VAT if the mail-order annual turnover from small consignments (that are import-tax-free) is at least CHF 100,000.

This will result in a removal of the VAT-related competitive disadvantages for domestic companies.

The impact of the reform is expected to increase in receipts by an estimated 70 CHF million per year, said the Federal Council.

Davide Anghileri

Davide Anghileri is a PhD candidate at the University of Lausanne, where he is writing his thesis on the attribution of profits to PEs. He researches transfer pricing issues and lectures for the Master of Advanced Studies in International Taxation and Executive Program on Transfer Pricing.

Anghileri, a Contributing Editor at MNE Tax, previously worked as a policy advisor to the Swiss government on BEPS issues. He can be reached at danghileri@yahoo.it.

Davide Anghileri


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