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Tax liability (indirect taxes)

Tax events

Normally, transactions with goods or services will spark one or more tax consequences. This is also the case under Swiss law.  Consequently, a foreign company that is involved in transactions that touch the Swiss jurisdiction will have to determine which tax events for which taxes and at what stage or stages of the transaction they will or may occur.

A range of taxes

Value added tax (VAT) may be the most prominent indirect tax, it is certainly not the only indirect tax.  Other levies, like excises, environmental taxes or truck road taxes should also be taken into account. Namely, logistic service supplier or suppliers in general may transfer these taxes to their principal/customer.

National tax characteristics

Despite the fact that Swiss indirect taxes may in name, taxable object, tax structure or technique used for taxation resemble indirect taxes levied by other countries, this does not imply that foreign companies can assume that Swiss indirect taxes operate in the same way as their own national indirect taxes.

Often foreign companies make wrong assumptions about Swiss indirect taxes and consequently base their transaction handling on erroneous belief. 

mirror drop - indirect tax liability

qualify transactions according to tax terminology

the decisive tax terminology is embedded in the applicable Swiss tax laws -ignored should be wishful thinking or own assumptions

online shop

compulsory or voluntary VAT liability?

A foreign company that operates an online shop that makes shipments to Swiss customers should verify whether it falls under the rules for compulsory Swiss VAT registration, or whether for commercial reasons (act as local retailer/distributor) a voluntary VAT registration should be considered.#VAT-liability-conditions


which goods are subject to excise?


Switzerland levies excises on mineral oil, tabacco, spirits and beer. The legislator tries to keep up with the developments, and therefore adjusts the scope, tax base or rates when appropriate. Foreign companies should verify on tares.ch in advance what levies can be expected at import.#liability-for-excises

voluntary VAT  registration

when opt for taxation?

When Swiss customers prefer a local purchase experience, and do not want to be bothered with border formalities or border taxes, a foreign seller may (have to) opt for voluntary Swiss VAT registration.#voluntary-VAT-liability

glass beverage containers (PDC)

prepaid disposal fee

The levy on glass beverage containers is a prepaid disposal fee based on the principal "the user pays". The PDC levy has an effect on  the border formalities. Namely, at import information like statistical key code and additional levies key will have to be mentioned in the import customs declaration. Consequently, suppliers will have to adopt their business and compliance processes to this obligation.#recycle-glass-beverage-containers


how to treat input transactions?

Foreign companies that in the scope of their Swiss transactions use subcontractors must verify whether these subcontractors themselves are also liable for Swiss VAT, and consequently what implications are implied for the VAT treatment at the border or domestically. #treatment-input-supplies

construction work

is VAT registration needed?

Construction activities performed in Switzerland are subject to Swiss VAT and normally will induce a Swiss VAT liability. Only under specific conditions a constructor may refrain from a Swiss VAT registration. None-compliance with these conditions will revive the Swiss VAT liability of the constructor.#VAT-on-construction-work

place of transaction

where is transaction subject to VAT?

The question whether a transaction is subject to Swiss VAT or not is a VAT-technical issue, determined by the VAT technique laid down in the Swiss VAT regulations. One cannot rely on foreign law, wishful thinking or own perceptions  when determining the place of transaction under Swiss VAT law.#VAT-at-place-transaction

volatile organic compounds (VOC's)

levy on volatile organic compounds

Volatile organic compounds (VOCs) are used for a wide range of solvent-using activities, and some VOC's are dangerous to human health or cause harm to the environment. The levy on VOC's is intended as an financial incentive to continuous reduction of VOC emissions. From an economical point of view, foreign sellers should include the VOC levy in their sales price calculation or bear the levy themselves.#tax-on-volatile-organic-compounds

commission agent

distribution structure


Regularly foreign suppliers prefer to use the services of a local / Swiss based commission agent, instead of acting themselves as local distributor / retailer. In such cases the foreign principal must have its business and compliance processes in place when applying a commission agent structure for purposes of Swiss VAT.#commission-agent-structure

fuel - excise

within threshold or license needed?

Within certain limits, foreign companies can import free of excise the fuel they bring along in the fuel tank of their truck or other vehicles / machinery. In particular the threshold for fuel in tanks of other vehicles / machinery is very limited. When exceeding the threshold an import license will be needed. Given the burden of the administrative procedure for obtaining a license it is better to respect the threshold and to buy domestically the needed fuel.#mineral-oil-excise


has recharging effect on character of costs?

The VAT treatment of recharged costs or supplies of goods / services is a challenging as well as more than often a source of misunderstanding. A foreign company that recharges expenditures -in connection with transactions that touch the Swiss jurisdiction- must understand the Swiss VAT rules that establish the VAT liability.#character-recharged-supply

zero-rated supply

0% VAT, thus no VAT liability?

A Swiss VAT liability may even arise  when a foreign supplier only renders tax relieved ("zero rated") supplies. Swiss VAT regulations stipulate various tax object or tax subject related reliefs (0% VAT) -provided certain conditions are met.#zero-rated-supplies

interior design

when subject to Swiss VAT?


Foreign architects or site managers that perform their services in connection with real estate located in Switzerland will become liable for Swiss VAT. These services can concern exterior / interior design, as well as garden design. Switzerland, renowned for its many beautiful chalets, is an important market for architectural design offered by foreign professionals.#VAT-on-interior-design

road tax

when is "LSVA" tax due?


When foreign suppliers of goods determine their price policy for sales to Swiss customers, they must be aware of the effect of the road tax for heavy vehicles. The tax, which is based on weight / levels of emission / distance driven in Switzerland (and Liechtenstein), is a cost that is linked to the transport of goods. From an economical point of view this cost should be transferred to the end-customer(s).#heavy-vehicle-road-tax

digital services

electronically supplied services subject to VAT?

Foreign companies that are not registered for purposes of Swiss VAT may become liable for Swiss VAT when they render electronically supplied services to B2C end users.#VAT-on-digital-services

changed transactions

what is the VAT impact of change of plans?


Transactions are a reflection of normal life and as such are similarly subject to factual change. When transactions change the question rises whether the VAT treatment will be effected respectively what the consequences for the invoice trail are, how the adjustments are to be processed and to be recorded in the bookkeeping and VAT return(s). #VAT-after-changed-plans

software installation

on-site software / IT services


The supply of software by installing, configuring, testing or updating by physically accessing hardware on a location within Switzerland is a deemed supply of goods for Swiss VAT purposes. Generally, this kind of activities will induce a Swiss VAT liability. Foreign software suppliers should think of this when drafting offers, contracts or invoices for down-payments.#on-location-IT-services


work on goods = supply of goods


Whereas other VAT systems may treat particular work on goods as a supply of services, Swiss VAT however will treat work on goods normally as a supply of goods -and by that qualification basically trigger a Swiss VAT liability. That liability will not only concern the domestic VAT treatment, but may also effect the VAT treatment at the border.#VAT-work-on-goods