Swiss VAT and foreign
taxable persons
Companies that are active on an international scale are regularly
confronted with the situation that purchases or expenses in foreign
countries bear local VAT. In a large number of cases foreign
companies are entitled to recuperate this VAT. Like any other
VAT system in the world, the Swiss VAT system contains a procedure
for refund of Swiss VAT to foreign companies born on purchases
or expenses they have made in the course of their business activities.
Although with 7.6% as standard tax rate the Swiss VAT rate is
rather low if compared with other European countries, the total
amount of input VAT that is annually charged to foreign companies
that are not registered for purposes of Swiss VAT shall not be
underestimated. If a foreign company is not, nor shall be registered
for purposes of Swiss VAT, the only way to get this Swiss input
VAT back is by applying the refund procedure.
Switzerland is not an EU member state, which causes some differences
compared with the VAT refund regulations or practice in the EU
member states.
VAT refund
Foreign companies that want to claim Swiss VAT
have to pay attention to procedural requirements and requirements
regarding the substantial law. The requirements of VAT refund
procedure can be outlined as follows:
- a threshold
of CHF 500, i.e. the refundable tax amount
shall be at least CHF 500.
- the VAT refund
procedure can only be applied once a year.
- the VAT refund
request shall be filed within six months
after the calendar year, for which the request
applies, has ended.
- the request
shall be filled by using the prescribed forms,
accompanied by the original invoices and
proof of the tax status in the country in
which the foreign company has its business
establishment.
- the foreign
company shall appoint a local fiscal representative.
- a foreign company
is not always entitled to VAT refund. Particular input VAT is
not eligible for refund, similar to domestic situations. However,
a VAT refund can also be excluded due to a regulation that exclusively
applies to foreign companies only.
- a foreign company
can only apply for a VAT refund in case it has not made domestic
supplies in Switzerland, even if the company did not fulfil the
conditions for Swiss VAT registration.
- in the scope of
the VAT refund procedure the original invoices are verified by
the tax authorities in order to determine whether the charged
input VAT qualifies for refund. The latter implies that a
foreign company is well adviced to review -or have reviewed-
the invoices in advance, i.e. before the VAT refund request is
submitted or the deadline for filing such a request nears the
end.
VAT refund claims for 2009 cannot be filed anymore (file date expired June 30, 2010).
VAT refund claims for 2010 that have not been received by us on June 23, 2011 will not be filed! You can file your 2010 Swiss VAT refund claim as of January 2011.
After June 23, 2011 we do not accept refund requests for 2010!
Never send us refund documents without contacting us in advance.
VAT liability
The VAT refund procedure is only open to foreign
companies that shall not be registered as taxable person for
purposes of Swiss VAT, nor have made supplies within Switzerland
in the calendar year/period for which refund is claimed.
Regularly,
foreign companies think that they can reclaim Swiss input VAT, whereas an analysis of their Swiss activities shows that
instead they should have been registered for purposes of Swiss
VAT and should have charged Swiss VAT on their Swiss supplies.
Consequently, foreign companies are recommended to determine
the VAT treatment of their Swiss activities in advance, i.e.
before the agreements are closed or transactions are performed,
in order to prevent that on a later point of time the foreign
company is confronted with a retroactive VAT liability. |
