VAT 2020: declaration of turnover for foreign companies
In November 2019, the Federal Tax Administration published the Info-VAT 22 brochure on foreign companies.
It specifies the tax, accounting and financial obligations of companies that have their headquarters abroad. This information completes the entry into force since 1 January 2018 of the revised VAT law ("A foreign company is compulsorily liable to VAT in Switzerland if it provides services on Swiss territory, on a global scale, a taxable turnover of at least CHF 100,000. For non-profit sports and cultural companies run on a voluntary basis as well as for public utility institutions, the turnover limit is set at CHF 150,000. ”).
The Info-VAT 22 brochure specifies that:
- The scope of turnover to be included in Swiss VAT returns is limited only to Swiss turnover. VAT-registered foreign companies are not required to declare their global turnover in their periodic VAT declaration.
- In the event that they have received counter-benefits excluded from the scope of tax or subsidies, it is however recommended to declare the global turnover.
- From their first service provided in Switzerland, foreign companies become taxable. In case of advance payment, the obligation to register with Swiss VAT takes place with the issuance of the invoice or receipt of the respective payment.
The contributor must report to the cantonal tax authority spontaneously, using the online form, within 30 days of the start of their tax liability.
- Foreign companies must provide security, the amount of which is generally equivalent to 3% of the amount of taxable turnover generated on Swiss territory (without exports), with a minimum of CHF 2,000 and a maximum of CHF 250,000. These securities are usually provided through cash deposits or guarantees with a bank based in Switzerland.
The diagram below will help you determine whether or not you are obliged to register with VAT: