Switzerland: Value added tax (VAT) reform legislation

Switzerland: Value added tax (VAT) reform legislation

The partial reform of the Swiss federal value added tax (VAT) law is intended to eliminate the competitive disadvantages of Swiss companies. The changes are scheduled to be effective 1 January 2018. The reformed law is expected to affect Swiss companies and foreign firms with business activities in Switzerland.

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Sectors affected by VAT reform

The holding company is one type of entity that is expected be affected by the VAT amendments. With respect to specific industrial sectors, it is anticipated that the following sectors would be affected by the VAT reform legislation:

  • Real estate (including construction companies)
  • Media
  • Energy suppliers
  • Providers of hotel restaurant services (including takeaways)
  • Political units

Dealers in works of art and antiques, as well as companies/organizations that are partially financed by donations and contributions from sponsors, may be affected. Taxpayers need to consider the potential changes that the VAT reform may have with respect to cross-border online trading—that is, new tax liabilities for online traders from outside Switzerland.

New obligation for foreign companies to register

Foreign companies with business activities in Switzerland would need to review their tax position in Switzerland, particularly because of provisions regarding the obligation to register for VAT purposes. A foreign company could be required to register even if its turnover is as little as CHF 1.

 

Read a January 2017 blog posting prepared by the KPMG member firm in Switzerland

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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