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News: change regarding requirement of posting security

As of 1st January 2024 requirement of posting security waived

In an apparent move to make Switzerland more attractive for foreign companies, the tax authorities will no longer demand from foreign companies to post a security when they register for purposes of Swiss VAT.

At this moment it is not clear how the Swiss tax authorities will handle situations in when a foreign company becomes default on their VAT debt payments, namely whether the Swiss tax authorities will use one or more of the following options:

  • request advance payments for future filing periods,
  • request to post a security,
  • change current rather liberal sanction policy for administrative fines to a more strict policy,
  • use criminal law sanctions, under the requirements for extraterritorial application, to enforce Swiss VAT compliance,
  • to terminate ex parte the Swiss VAT registration of default foreign companies, without the possibility to register again in future.

Securities currently posted

Foreign companies that in the scope of the Swiss VAT registration posted before the end of 2023 a security will receive the security back, somewhere in 2024.

Given the number of foreign companies registered for Swiss VAT, it will make take some time before all eligible foreign companies have received their security back. VAT plus advises those companies to wait patiently before their turn has come.