ZURICH: Switzerland will now be liable to register for VAT if they have a turnover in Switzerland and abroad totaling at least CHF 100,000 from supplies which are not tax-exempt (at present only the turnover in Switzerland is taken into account). Foreign businesses will thus be treated in the same way in Switzerland as Swiss businesses are in the EU.
The rule continues to apply whereby foreign businesses whose sole supplies in Switzerland are exempt from VAT with the right to claim input tax, or subject to acquisition tax (reverse charge), do not have to register for VAT in Switzerland. These include foreign businesses that provide solely services in Switzerland for which the place of supply under art. 8 para. 1 VATA is deemed to be the place of business of the recipients of the supply. This applies irrespective of the size of the turnover generated with such services. Such foreign businesses do not become liable to register for VAT in Switzerland until they make a taxable supply in Switzerland, and they cease to be liable to register at the end of the calendar year in which the last taxable supply was made in Switzerland.
The reduced tax rate of 2.5% will also apply as from 1 January 2018 for electronic newspapers, magazines and books without advertising character. The partial revision of the VATA put the electronic products on the same footing as the printed products.
Supplies which are made in 2018 are subject to the new tax rates, where these have been reduced. This applies irrespective of the date when the supply is invoiced. In this connection, please note that supplies which are partly made in 2017 and partly in 2018 must be invoiced pro rata: the “old” tax rate must be used for that part of the supply which is made in 2017. Apart from that the new VAT rates must be applied.
