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VAT refund

Who is entitled to VAT refund?

Foreign companies, i.e. enterprises with their business establishment outside Switzerland, that purchase Swiss goods or services for business purposes can get a refund of the Swiss VAT they have paid on these purchases. However, this possibility is subject to a number of conditions.

The VAT refund facility for foreign companies must not be confused with tax free shopping for tourists.

The provisions of substantive and procedural law specifically relating to VAT refund are laid in the VAT Regulation and in the notice VAT-Info No 18.

Conditions for entitlement to VAT refund

For a successful VAT refund request the follow­ing accumulative conditions must be fulfilled:

  • the company that claims the VAT refund must have his business establishment or branch outside Switzerland,
  • the company is not registered as taxable person for domestic (i.e. Switzerland and Liechtenstein), nor liable for VAT according to the rules for compulsory VAT liability,
  • the company did not make domestic supplies during the period for which VAT refund is claimed,
  • the quality of entrepreneur in the country in which  the company has its business establishment or branch is proven with a tax certificate (valid for the refund year/not older than 1 year),
  • the invoices for which VAT refund is claimed fulfill the invoice conditions according to Swiss VAT law and concern the running VAT refund period (i.e. previous calendar year),
  • the country in which the company has its business establishment or branch acknowledges reciprocity (verify form 1224),
  • the VAT refund request can be submitted once a year, concerning the previous calendar year,
  • the VAT refund request is submitted within 6 months after the calendar year has ended (i.e. deadline is 30 June),
  • the claimable VAT refund amount is CHF 500 or more.

Formal requirements

  • the VAT refund request is filed with use of the official forms published by the Swiss tax authorities, namely form 1222 (refund request) and form 1223 (invoice list). Use of other forms is not allowed.
  • the foreign company that requests the VAT refund has (compulsory) to appoint a representative with place of residence in Switzerland. That representative is either a (natural) person or a legal entity. The proxy of the representation is embedded in form 1222, and is only valid for the particular VAT refund request.

Deadline

  • a refund request has to be submitted between 1 January and 30 June of the year that follows on the tax period (calendar year) for which the VAT refund is claimed. Thus, the VAT refund request has to be submitted within six months after the calendar year has ended.
  • the deadline cannot be extended. The date of the post stamp is decisive for determining whether the deadline has been met.

Reciprocity

According to Article 152 Par. 1 Swiss VAT Regulation (“MWSTV”) reciprocity is deemed when:

  1. companies with their business establishment in Switzerland are entitled to VAT refund on expenditures, whereas the entitlement corresponds with the input tax recovery to which local companies, i.e. companies with their business establishment in the foreign country, are entitled;
  2. the particular foreign country does not levy a tax that is comparable with the Swiss VAT, or
  3. the particular foreign country levies a tax that is comparable with the Swiss VAT, whereas companies with their business establishment in the foreign country are subject to that tax in the same as extent as companies with their business establishment in Switzerland.

The Swiss tax authorities maintain a country list in which countries are listed with which Switzerland has exchanged statements of acknowledgement of reciprocity, or for which reciprocity has been proven or has been verified.

In case a country is not mentioned in the list and in which the company that claims VAT refund has its residence, that company has the possibility to prove to the Swiss tax authorities that nevertheless the conditions for reciprocity according to Article 152 Par. 1 Swiss VAT Regulation have been fulfilled. Such proof will be verified by the Swiss tax authorities, provided the following conditions have been met:

  • the company that claims VAT refund hands over a confirmation by the competent tax authorities, in which they declare that in their jurisdiction the conditions for reciprocity according to Article 152 Par. 1 Swiss VAT Regulation have been fulfilled,
  • the aforementioned confirmation must be provided in one of the official languages of Switzerland (German, French or Italian) or in english. Otherwise, an additional notarially certified translation in one of the official languages will be necessary,
  • the verification by the Swiss tax authorities ends with the result that the other country indeed grants reciprocity. In that case the refund of Swiss VAT will be granted.

The country list 1224 is updated by the Swiss tax authorities after each positive verification respectivelly is updated annually. 

Proof of payment

Only the actual paid VAT is eligible for refund. On request the underlying proof of payment must be disclosed to the Swiss tax authorities.