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Newsletter VAT

Our newsletter provides concise, clear and understandable information on the latest developments in VAT tax practices that have an impact on the Swiss market.

February 2021

The total revision of the Customs Act was in the consultation phase until 31 December 2020; now the
report on the results and the draft law with a legislative message will be sent through the councils.
Processes and systems are to be consistently simplified, standardised and digitalised. The focus is on
security. This is also the goal of the new ICS2 in the EU.

Download – Revision of the Customs Act

December 2020

Towards the end of the year, the question repeatedly arises whether special VAT regulations have to be considered or whether any corrections (e.g. of already declared input VAT deductions) have to be made or included in the last quarterly VAT return of the year. In particular, it is not uncommon for the correction flat rate for interest income to be applied. When may/should this be used and when is no correction necessary?

Download – VAT distinction: Interest/income from securities – Dividends

October 2020

It happens again and again that companies want to outsource a branch of business or transfer it to a new
company to be founded (so-called spin-off). This is often done retroactively, e.g. to the beginning of the
current year. In this case, which company owes the VAT amounts attributable to the spin-off branch of
business?

Download – Liability for VAT after spin-off

August 2020

It has always been clear that you should not play around with the Swiss Federal Tax Administration
(SFTA). But the fact that the SFTA is now intervening in online gaming is completely new – and leads to
many questions.

Download – Online casinos and VAT – a paradox?

June 2020

A call from a VAT auditor announcing VAT controls of up to five previous years can concern, unsettle or even panic businesses. „He will dig until he finds something“; this is the general fear of VAT liable businesses. Is a VAT audit really that terrible?

Download – Help! A VAT audit was announced

May 2020

For a company to be able to meet its current payment obligations, it must be liquid.
The liquidity of a company is essential for its continued existence. Especially in economically difficult times,
such as those caused by the COVID-19 pandemic, it is extremely important to pay attention to all sources of liquidity.
Don‘t forget the input VAT and get your money back in time!

Download – Looking for money in times of COVID-19? Input VAT as a source of liquidity!

April 2020

Many Swiss groups apply VAT group taxation in order to benefit from the considerable financial advantages
resulting from the elimination of taxation of internal turnover. The possibility of group taxation is
often discussed much later, after the establishment and/or VAT registration of a Swiss company. Is a retroactive
combination as a VAT group even possible?

Download – Retroactive VAT group taxation

February 2020

Rail travel is in – not just since Greta Thunberg. Nevertheless, there are always people who like to travel
by car to be independent and faster at the planned place of arrival. In addition to the art of driving a car,
VAT and customs should never be ignored…

Download – VAT and customs duty for cross-border vehicle use

October 2019

The Federal Administrative Court has already ruled several times on the VAT qualification of brokerage services for financial services (see our article of November 2017). The Federal Tax Administration (FTA) has lodged a complaint against this decision in order to set it aside. Now the time has come: The Federal Supreme Court has ruled and confirmed the opinion of the FTA in its ruling.

Download – Brokering Financial Services: Swiss Federal Supreme Court finally decides on VAT-Qualification

May 2019

March 29, April 12, May 22 – what do these dates have in common? These dates were deadlines set by the European Union and the UK Parliament that the UK will leave the EU. However, the game goes into another period of extra time to avoid the “hard Brexit”. Now, the Brexit will likely fall on Halloween, October 31… Probably, this is even more appropriate.

Download – Brexit: The game goes into another period of extra time!

March 2019

Switzerland has concluded free trade agreements with various states, simplifying access to international markets. Swiss companies can export goods with customs tariff privileges (so-called preferential tariffs) into the countries of destination exempt from duty or at reduced tariff rates. The preferential treatment does, however, only apply to goods satisfying the applicable provisions with regard to origin and procedure of the free trade agreement, i.e. for which you can particularly prove corresponding origin of the goods as the free trade partners only favour each other and no other states.

Download – Preferential Customs Tariffs and Supplier Declarations

February 2019

In our July 2018 newsletter, we looked at the new Swiss VAT obligations for the e-commerce business that were to come into force from 1 January 2019. We want to explain again today when the tax obligations for so called distance selling companies begin and why additional registration with Swiss Post is necessary in certain cases. And why do Chinese dealers send goods (almost) free of charge?

Download – Distance selling update

Special Edition – January 2019

Yesterday’s vote in the UK parliament was pretty clear: The Withdrawal Agreement on the future relationship between the UK and the EU was rejected. What’s next…?

Download – UK and EU – Game Over?

December 2018

The security of international goods and service supply chains, as well as the associated statutory requirements for cross-border freight traffic, is an ongoing point of discussion – especially after the attacks of September 11, 2001. Numerous countries have enacted provisions to secure supply chains and, in particular, introduced the status of Authorised Economic Operator (AEO). Many companies are now wondering whether this status is worthwhile for their own businesses.

Download – AEO – Authorised Economic Operator

November 2018

Under certain conditions, EU directives can also take direct effect, as happened in a legal case in Germany with regard to Art. 307 of the VAT system directive (Separate regulation for travel agents). The question was if recipients of travel services also qualified as companies according to the VAT system directive or if these could only be end-consumers in accordance with German VAT law.

Download – Direct application of the European VAT directive

September 2018

In our August edition of vat‘s important, we described how important it is to know and keep track of your supply chain. However, for companies that operate internationally, this is easier said than done. How can I make sure that the transaction mapping set up (see our August Newsletter) is really complied with? Today‘s newsletter provides valuable tips.

Download – Process management

Special Edition – September 2018

In the May-Edition of our newsletter, we reported on the fees for radio and TV, which were to be payable as of 2019 by all companies that are subject to VAT. On 30 August 2018, the Federal Tax Administration (SFTA) fortunately issued a notice that this obligation would not be applicable to foreign companies without a subsidiary in Switzerland after all.

Download – Great news: No RTV fees for foreign companies after all

August 2018

Globalisation is on everyone’s lips. The fact that globalisation can also have great impact in the area of indirect taxation in connection with the entry of goods is not always on the radars of internationally active companies, however, this can lead to enormous costs. Our experience tells us that only few
companies are really aware that one of the many effects of globalisation can even be a reduction in costs, as the August edition of vat’s important reports.

Download – Do I know my supply chains?

July 2018

For supplies of goods from abroad into Switzerland, the place of supply is not always deemed to be abroad. On the one hand, there are voluntary options through which the place of supply changes to the Swiss territory – with the consequence that Swiss VAT must be charged. On the other hand, however, this could also be the obligatory consequence for companies. We would like to point out the individual cases in this newsletter.

Download – Foreign or domestic place of supply – Pros and Cons?

June 2018

In this newsletter, we would like to address the constantly-recurring issues of specific VAT risks, of which both Swiss and foreign companies are generally unaware. One has to do with formalities in connection with imports, while the other deals with VAT impli-cations for services under an installation agreement.

Download – Caution advised for cross-border deliveries

May 2018

From 2019, every company that is subject to VAT in Switzerland and has a worldwide minimum turnover of CHF 500,000 must pay a contribution for radio and TV. The basis of this contribution liability thus changes: whereas previously this depended on whether or not the company had a receiver, this new contribution in the future will generally affect every single company.

Download – Contributions for radio and TV as of 2019 – What does that have to do with Swiss VAT?

March 2018

Most companies have in the meantime submitted their 4th quarter 2017 VAT declaration to the Swiss Federal Tax Administration (SFTA), but the 2017 value added tax reporting obligation is not yet completed with this. The taxable person still has to reconcile the value added tax for the entire year as part of the so-called finalization.

Download – VAT Finalization

February 2018

The year 2018 has brought and brings about some alterations from an indirect tax per-spective. Much has already been written and reported about it. Unfortunately, it is our ex-perience that not everyone is aware of these new developments. We therefore want to seize this opportunity and reiterate how important the following issues are to every single business.

Download – Chaos in the application of the new VAT rates as well as the mandatory electronic tax assessment

November 2017

After 2014, in its judgement of 3rd October 2017, the Federal Administrative Court again assessed the mediation in the financial services sector as being subject to VAT. Accordingly, the mediation should be oriented as was customary until 2009 – by means of direct representation! In order to finally have legal certainty a final decision on this case by the Federal Court would be desirable.

Download – Renewed judgement on the provision of financial services

December 2016

160 countries levy a national consumption tax and the U.S. (we) are the only country in the OECD that does not. The past 8 years of federal deficits plus the projected deficits over the next 25 years have raised concern about how long we can continue deficit spending and still avoid a fiscal crisis. Are we ready for a serious debate about a overhaul of our tax system before the window of opportunity closes?  

Download – A U.S. VAT: It’s probably inevitable

November 2016

160 countries levy a national consumption tax and the U.S. (we) are the only country in the OECD that does not. 1 The past 8 years of federal deficits plus the projected deficits over the next 25 years have raised concern about how long we can continue deficit spending and still avoid a fiscal crisis. Are we ready for a serious debate about an overhaul of our tax system before the window of opportunity closes?

Original published on: https://www.picpa.org/articles/journal-articles/article/2016/11/28/can-a-value-added-tax-put-our-debt-in-order

Download – A U.S. VAT: IT’S PROBABLY INEVITABLE

March 2015

In October 2014, the Federal Administrative Court reached a decision (23/10/2014, A-4913/2013) with potentially far-reaching consequences in the field of Swiss value added tax (VAT): The concept of mediation is to be interpreted in the same way as under the old VAT law (MWSTG), valid until 31st December 2009.

Download – PrimeTax Info VAT 03/2015

Publication in the journal “Expert Focus”

January 2015

“Many foreign companies provide electronic services (e.g. cloud computing, software, server facilities, online films, music, books.) to non-taxable private individuals based in the European Union (EU). However, only a few of them are aware that specific regulations for charging and reporting Value Added Tax (VAT) have to be applied – never mind if these companies have a presence in the European Union or not.”

E-Services publication

December 2014

On 12th November 2014, the Federal Council adopted two amendments to the VAT provisions. On the one hand these are concerned with the VAT liability of foreign companies in Switzerland, and on the other hand with group taxation for pension funds. The amendments shall enter in force as of 1st January 2015.

Download – PrimeTax Info VAT 12/2014

July 2014

US companies providing electronic services (e.g. cloud computing, software, server facilities, online films, music, books.) to non-taxable private individuals based in the European Union (EU), specific regulations for charging and reporting Value Added Tax (VAT) have to be applied. This impacts all companies – never mind if these companies have a presence in the European Union or not.

Download – PrimeTax Info VAT 07/2014

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