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VAT compliance

compulsory VAT liability

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Foreign companies that perform activities in Switzerland or are involved in transactions that are subject to Swiss VAT may need to register for purposes of Swiss VAT. Generally, companies shall verify the conditions for compulsory VAT registration if their activities are subject to Swiss VAT, the amount of turnover (realized with the Swiss activities) subject to Swiss VAT is more than CHF 100’000 annually, and when the foreign company would be the person who is liable for Swiss VAT (and not the recipient/customer).

Examples of foreign companies that make business-to-business supplies and who may become liable for purposes of Swiss VAT:

  • suppliers of goods (e.g. machinery) that are assembled/installed by or for account of the supplier,
  • suppliers of construction work on sites in Switzerland,
  • organizers of events (e.g. seminar, congress, exhibition) that take place in Switzerland,
  • suppliers that rent out goods in Switzerland.

Opt for VAT registration

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Companies that do not fulfill the conditions for compulsory VAT registration may choose for voluntary VAT registration. However, similar like in the case of compulsory VAT registration, a foreign company can only opt for voluntary VAT registration when indeed taxable/qualifying turnover in Switzerland is realized.
The option of voluntary VAT registration in Switzerland is for example used by foreign companies that want to act as local distributor in Switzerland. In that case they will act as importer for purposes of Swiss VAT and tax the supplies to their customers as domestic (Swiss) supplies. To that end they will need a special license that will allow the foreign supplier to act as importer. The latter license actually enables the foreign supplier to register (voluntarily) for purposes of Swiss VAT.
Voluntary VAT registration is often also chosen by foreign companies that do not meet the threshold for compulsory VAT registration (CHF 100’000 annually), but want to be able to claim substantial amounts of Swiss input VAT (for example when local subcontractors are involved).

Excluded from VAT liability

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Not every company is obligated to register for purposes of Swiss VAT. For services that are taxable at the place where the recipient has its business establishment/residence, foreign companies are not liable for Swiss VAT in case the VAT liability is shifted to the Swiss recipient.
Furthermore, companies that import goods from outside Switzerland and install them may under certain conditions also refrain from Swiss VAT registration in case at import in Switzerland the full contract value (goods and services) has been declared as customs value at import in Switzerland. In such a case the whole transaction value is taxed with VAT at import. However, foreign companies that apply this solution will not be able to recover Swiss input VAT.

Steps to be taken

The Swiss VAT registration process comprises of several steps that follow in a logical order

Learn more

Registration process

The registration process for purposes of Swiss VAT is rather uncomplicated. Generally, the steps in the registration procedure are completing the online questionnaire, appointing a fiscal representative in Switzerland, and arranging the security (bank guarantee or deposit) on behalf of and as demanded by the Swiss tax authorities.

Online registration

The online VAT registration questionnaire is the first official step in getting registered for purposes of Swiss VAT. The information needed to disclose is basic, but nevertheless crucial for the evaluation of your VAT registration application. Furthermore, when completing the VAT registration questionnaire, it shall be kept in mind that by completing and submitting the questionnaire you make legal binding statements.

Plan registration

Foreign companies that want or need to register for purposes of Swiss VAT shall adopt a project plan when aiming at a flawless implementation of the Swiss VAT liability and compliance processes.
The planning shall start before transactions take place or invoices are issued. Ideally, before signing contracts you shall evaluate the Swiss VAT position of your foreign company.