Changes governing Swiss VAT liability

As of 1 January 2018, whether a company must be registered in the Swiss VAT register will no longer be calculated based on the turnover generated in Switzerland, but on the worldwide turnover. Accordingly, if a company generates at least CHF 100,000 in worldwide turnover, it will be liable for VAT purposes from the beginning of its activities in Switzerland.

Foreign companies that exclusively provide services which are subject to the reverse charge procedure in Switzerland (Bezugsteuer) do not have to register for Swiss VAT purposes. This applies regardless of the amount of turnover generated.

Low-value shipments will generally still be exempt from VAT upon import. It was decided, however, to remove the CHF 5 VAT exception for all foreign retailers generating revenue of more than CHF 100,000 per year in Switzerland. Foreign retailers that generate over CHF 100,000 per year in turnover in Switzerland through the supply of goods will thus be liable to VAT and VAT has to be charged on the goods supplied (this affects deliveries from foreign popular online shops). This change will be applicable as of 1 January 2019 (the introduction of this change has subsequently been delayed by one year).

Amended Swiss VAT rates

Due to the fact that the bills on the “Reform der Altersvorsorge 2020” and the “Zusatzfinanzierung der Alters- und Hinterlassenenversicherung durch eine Erhöhung der Mehrwertsteuer” were rejected by the Swiss people on 24 September 2017, VAT rates will decrease from 1 January 2018 on. The VAT rates as of 1 January 2018 in effect are:

• Standard rate: 7.7% (currently 8%)
• Special rate (accommodation services): 3.7% (currently 3.8%)
• Reduced rate (food etc.): 2.5% (unchanged)

Services rendered in 2018 are subject to the new VAT rate, irrespective of the date of the invoice. Please note that with regard to services that spread over 2017 and 2018, services have to be invoiced pro rata temporis with the respective VAT rate. 

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