This documentation is for Taxamo v1. If your account is with Taxamo v2 use the documentation at integrate.taxamo.com/doc.
If you are uncertain of your version please contact support@taxamo.com for assistance.

Do foreign suppliers need to charge VAT for sales to Switzerland?

Yes, since January 1, 2010, the Swiss Tax Authority has levied a value added tax (VAT) on the supply of services from non-resident companies to Swiss residents. The purpose is to tax non-business end use on Swiss territory.

The VAT levies:

  • A tax on goods and services supplied for consideration by taxable persons on Swiss territory (domestic tax);
  • A tax on the acquisition by recipients on Swiss territory of supplies from businesses domiciled abroad (acquisition tax);
  • A tax on the import of goods (import tax).

The tax is levied on the following principles:

  • Competitive neutrality;
  • Efficiency of payment and imposition;
  • Transferability.

Is there a VAT registration threshold?

Yes, a sales threshold of CHF 100,000 applies as of May 2016. This threshold is calculated over a consecutive 12-month period.

The Taxamo solution provides an alert within the merchant portal to reflect the position relative to the threshold. The merchant’s position is shown relative to the period that they are viewing for reports, e.g. monthly, quarterly, yearly, or the past 12 months.

Note: There are plans in Swiss legislation that this threshold will change from CHF 100,000 (circa €91,000/GBP£71,000/USD$103,000) of sales to Swiss-based residents to CHF 100,000 of worldwide sale. This change was originally planned for January 2017 but has been refixed for January 1, 2018.

What e-services are in scope for VAT in Switzerland?

The following telecommunication and electronic services in particular are cited in Article 10 paragraph 2 of the Swiss VAT Act:

  • Radio and television services;
  • The provision of access authorisation, in particular to fixed line and mobile networks, to satellite communication and to other information networks;
  • The provision and guarantee of data transfer capacity;
  • The provision of websites, web-hosting, and the tele-servicing of programs and equipment;
  • The electronic provision of software and its updating;
  • The electronic provision of images, texts and information and the provision of databases;
  • The electronic provision of music, films and games, including games of chance and lotteries.

Telecommunication or electronic services do not include in particular:

  • The mere communication between the persons providing and receiving the service by wire, wireless, optical or other electro-magnetic media;
  • Educational services within the meaning of Article 21 paragraph 2 number 11 VAT Act in interactive form;
  • The mere lending for use of precisely designated equipment or equipment parts for the sole use of the lessee for the transmittal of data.

What is the Swiss VAT rate?

The Swiss VAT rate is 8%.

There is also a reduced rate of 2.5% - this rate only applies to certain everyday consumer goods such as foodstuffs, non-alcoholic beverages, books, newspapers, magazines, medicines, but also to tickets for sports and cultural events.

How do I enable VAT for Switzerland in Taxamo?

Assuming your product/services qualify as digital goods/services in Switzerland and you are above the threshold to pay VAT in Switzerland, then complete the following steps:

  1. Log into the Taxamo Merchant Portal and go to: My account > Tax regions.
  2. Enable in test mode or live mode for the relevant dates.
  3. Enter your Swiss VAT number.

If you are accessing Taxamo using a method other than the API or the Taxamo checkout form (such as with a plugin) please confirm that it has been upgraded to support Switzerland.

Is there a requirement to have tax agent?

Yes, if your company is a Swiss non-resident then you will need to appoint a tax representative.

The tax representative takes on the responsibility for the correct submission of the tax returns and the remittance of VAT to the Swiss tax authority. However, the tax representative is not liable for the tax payable.

Is there an online system to submit VAT returns?

Since September 2015 there is an option of using the Federal Tax Authority’s (FTA) SuisseTax (more here) online tax return system.

A VAT-registered foreign company’s use of this online system will still need to be operated via the authorised Swiss tax agent.

How often are VAT returns filed?

In principle VAT returns are filed quarterly but there is also the option of filing monthly, bi-annually, or annually.

As the tax filing period varies for merchants depending on which category they fall into, the Taxamo solution allows the merchant to run tax settlement reports on a month-to-month basis. This enables merchants to select the start and end month that is appropriate to their business model.

The filing deadline is 60 days after the end of the reporting period or the date where the liability ceases (e.g. deregistration).

What are the invoicing requirements for companies registered with Switzerland’s VAT system?

The supplier of a service must on request issue the recipient of the supply with an invoice that satisfies the following requirements as per the advice from the Swiss Federal Tax Agency (FTA):

The invoice must clearly identify the supplier, the recipient, and the nature of the supply and as a rule contain the following elements:

  • The name and the location of the supplier in the form in which they present themselves in business transactions, and the supplier’s Swiss VAT number;
  • The name and location of the recipient of the supply in the form in which they present themselves in business transactions;
  • The date or period of the provision of the supply, in the event that it differs from the invoice date;
  • The nature, object, and extent of the supply;
  • The consideration for the supply;
  • The applicable tax rate and the tax amount payable on the consideration; if the consideration includes the tax, details of the applicable tax rate suffice.

How are sales in foreign currencies treated?

If a merchant transacts in non-CHF currencies, e.g. USD, these transactions must be converted to CHF for the tax return. There is a choice between daily or monthly rates.

The daily rate is available from the Swiss tax authority website here, while the monthly rate can be accessed here.

What are the rounding rules for the VAT return?

Rounding needs to be made based on commercial rules and to the next CHF 0.05.

For example, amounts of 0.01, 0.02, 0.06, and 0.07 will be rounded down, amounts of 0.03, 0.04, 0.08, and 0.09 are to be rounded up.

How are adjustments treated?

If a tax return includes errors, the merchant is required to submit another tax return corresponding to the same tax period.

For example, if your tax return of Q2 2016 includes errors, it is required to remit a new tax return of the same tax period, i.e. Q2 2016.

What documentation and compliance requirements apply?

According to Article 70 of the Swiss VAT Act, each taxable person is required to record the supplies of goods and services made by and to him, the importation of goods and the exportation of goods from Switzerland as well as other data which could be of importance regarding the levying of VAT in Switzerland.

On request, the VAT authorities may allow simplifications/derogations to/from the general tax calculation requirements (article 80 of the VAT Act).

VAT auditors can inspect the following documents:

  • Accounting and financial statements
  • Creditors’ bills
  • Accounting records
  • Annual lists of debtors, creditors, inventories of merchandise and status of work in progress
  • Wage documentation
  • Import and export documents
  • Purchase contracts and leasing, etc.

Potential audits can go back to five previous closed tax years as prescribed in Article 42 of the Swiss VAT Act.

Where the merchant is using the Taxamo invoicing solution a copies of all invoices are retained. In cases where the merchant is not using the Taxamo invoicing solution, the transaction information and evidence is retained.

How long should data be retained for audit purposes?

Every taxable person must keep their records for a period of at least 10 years. The documentation concerning immovable property must be kept for 20 years.

The taxable person may convert the records to microfilm or scan them, in which case the original documentation may be destroyed.