Commercial activity in Switzerland and VAT liabilityVersion Française
Since January 1 st 2018, all foreign companies are liable to Swiss VAT as long as they supply at least CHF 100,000 per year in goods and/or services taxable in Switzerland and worldwide.
Revenues excluded of VAT, for example in the education or human medicine sectors, are not included in the CHF 100,000 limit.
Only those revenues generated in Switzerland will be taxable.
Charpentes SA in Lyon (France) generates a global revenue of € 2 million per year. Supplies are provided in Switzerland for CHF 50,000. Charpentes SA is liable to Swiss VAT.
Los Ramblas SA in Barcelona (Spain) is specialized in computer system installation and generates a global revenue of € 800,000 per year. Supplies are provided in Switzerland for CHF 15,000. Los Ramblas SA is liable to VAT in Switzerland.
As long as a foreign company only provides in Switzerland services - for example in the realms of consulting or management - it is not mandatorily liable to Swiss VAT, no matter the level of revenue generated. It will be the recipient in Switzerland who will have to self-liquidate the Swiss VAT.
Europe SA in Brussels (Belgium) provides supplies in management to its Swiss entity Europe (Switzerland) SA for CHF 120,000 per year. Europe SA is not liable to VAT. However, the Swiss entity Europe (Switzerland) SA will have to self-liquidate the Swiss VAT.
Designate a VAT tax representative domiciled or having their place of business in Switzerland*.
Give all necessary information to the Federal Tax Administration (FTA), especially at the beginning of the activity in Switzerland, generated revenues or to be generated in Switzerland, etc.
Provide a guarantee of the tax payment equivalent to 3% of the yearly revenues that will be generated in Switzerland (minimum CHF 2,000 and maximum CHF 250,000). This financial guarantee can be provided through cash payment or through a guarantee by a bank in Switzerland.
After designation of the VAT tax representative and the deposit of the financial guarantee, the FTA provides the foreign company with a VAT number.
*To facilitate the formalities of VAT liability and the establishment of the interim VAT settlements, we recommend you to contact one of our partners who will be able to assist you in your proceedings and become your VAT tax representative in Switzerland.