A tax applied to the sale of products and consumer goods, VAT is one of the main sources of financing for the countries of the European Union. If it significantly marks the French tax landscape, representing nearly 50% of tax revenue, it is also so for Switzerland. This country has the same VAT system as EU countries, although it is not part of it. I invite you to discover the subjection to the Swiss value added tax.
VAT or Value Added Tax is a consumption tax that only weighs on the end consumer. Liability for this tax depends on the nature of the transactions carried out and the products concerned. Be aware that the VAT remains the same, regardless of the service or product, the production process or the marketing chain.
Any business is potentially subject to VAT, whether it is non-profit or not, in particular when it is operated independently and generates permanent revenue. To this end, when the goods or services are intended for consumption or traded on the market and generate revenue, the company is subject to VAT.
In Switzerland, a company is subject to VAT when it achieves a turnover of more than CHF 100,000 per year . Otherwise, especially when it is below this threshold, it will be released from this tax. However, the business is free to voluntarily submit to VAT.
If sectors such as medical, cultural and educational services are completely exempt from VAT, that of trade reaches 7.7%. The hotel and accommodation sector benefits from a special rate of 3.7%, while this is reduced to 2.5% for the food or health sector.
For the management of your taxes , do not hesitate to call on a tax representative for Swiss VAT, who can also offer you valuable advice by representing you for your VAT declarations .
He can also check your periodic documents and recover your VAT in Switzerland, but also take care of establishing the annual reconciliation of your turnover and tax, which frees you from all the tasks related to your liability in Switzerland.
Since January 1, 2018, any company established in Switzerland or providing services there is compulsorily subject to VAT in Switzerland if it achieves an annual turnover of CHF 100,000 (around 85,000 euros), in the country or abroad. the stranger.
Current legislation requires you to have tax representation in Switzerland and requires you to register with the AFC or Federal Tax Administration. You must then provide certain guarantees certifying your ability to settle your tax debt. These can be in the form of a joint surety by a bank in Switzerland or a cash deposit.
Also be aware that companies that make deliveries in this country or that provide telecommunications or electronics services are likely to be subject to VAT in Switzerland depending on their annual turnover. These include e-commerce businesses operating in the delivery of low-cost parcels with a turnover of more than CHF 100,000 and certain companies carrying out activities in the field of construction and civil engineering.
Submission is also mandatory for:
– non-profit sports or cultural societies managed on a voluntary basis with a turnover of at least 150,000 francs on services provided in Switzerland and abroad
– public utility institutions with a turnover of at least 150,000 francs for their services provided in Switzerland and abroad
– institutions governed by public law with a turnover of at least 100,000 francs , resulting from taxable services provided to third parties other than public authorities
– celebrations or large-scale sporting or cultural events , whose receipts from catering services, food stands, sponsorship or advertising reach at least 100,000 francs
Only companies whose head office is abroad and which provide exempt services and services subject to acquisition tax are not subject to VAT. A French company can be exempted from VAT registration in Switzerland when it offers its services from France and/or produces gas or heating.
When the threshold is not reached, that is to say that your turnover is below CHF 100,000, know that you can voluntarily subject your company to VAT . You must therefore submit a tax application to the AFC.
Although this entails an additional administrative burden, it can be beneficial from a tax and economic point of view if you have to pay an amount lower than your VAT, which you can recover on purchases, overheads and investments in VAT statements.
For companies based on Swiss territory, voluntary registration in the register of persons subject to VAT can be carried out at the beginning of the current tax period . With regard to foreign companies, the declaration of voluntary registration can be made from the start of the provision of the service on Swiss territory and during the tax period.
For companies established on Swiss territory, liability ends when the company’s activity ceases or when the liquidation procedure is closed , during the liquidation of assets.
For foreign companies, it ends at the end of the calendar year during which the last service was provided in the country. You must therefore make a request for cancellation in writing to the AFC , within 30 days.
You should also know that you can request your removal from the register of persons subject to Swiss VAT if your company’s turnover no longer reaches the threshold of 100,000 francs. You can thus free yourself from subjection.