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Federal Council of Switzerland defines VAT liability of foreign companies more precisely

During its meeting dated November 12, 2014, the Swiss Federal Council approved two amendments to the Value Added Tax Ordinance (VATO) and resolved to bring them into force on 1. January 2015.

In the future, foreign companies, just like Swiss companies, will be liable for tax in the event of deliveries in Switzerland that are subject to purchase tax if their turnover in Switzerland amounts to at least CHF 100,000. This concerns primarily foreign companies that carry out work in the construction and construction-related sector in Switzerland. Foreign companies will remain exempt from the tax liability if they solely provide services that are subject to purchase tax, even if they thus generate turnover of more than CHF 100,000 p.a. in Switzerland.

The rules should apply until the partial revision of the Value Added Tax Act (VATA) comes into force and serve to ensure better enforcement of VAT liability via-à-vis foreign companies. It is planned with the partial revision of the VATA that domestic and foreign companies will be subject to tax from the first franc of turnover in Switzerland if their worldwide turnover amounts to more than CHF 100,000. The partial revision of the VATA was out for consultation until the end of September 2014, and the results are now being evaluated.

Please contact our Swiss Member Firm by any questions: ACCTA ACCOUNTING & TAX AG, Dr. Manuel Vogel (m.vogel@accta.ch / +41 41 749 40 90)

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