As of 1st January 2018, certain foreign companies that are recipients of domestic supplies, have a greater opportunity to reclaim the input tax they incur in Switzerland.
Generally, foreign companies that are neither resident nor registered for VAT in Switzerland are eligible to submit VAT refund claims, subject to certain conditions and requirements, provided they don’t perform supplies of goods or services in Switzerland, excluding certain VAT-exempt with credit transactions.
Before 1st January 2018, the category of these exceptions was limited to specified transport services and services performed in Switzerland that are subject to the reverse charge mechanism.
However, as of this date, under the amended Swiss VAT legislation, the scope of the excluded transactions includes:
• All supplies of goods that are exempt with credit, such as exports of goods and services connected with those supplies;
• Supplies of services subject to the reverse charge (not including business-to consumer digital services); and
• Supplies of cable-transported electricity, gas through the natural gas distribution network and heating provided to taxpayers in Switzerland.
The scheme applies to VAT refund claims with a value of at least CHF 500. The claim must be filed with the Swiss tax authorities by 30th June of the year, following the year, in which the goods and services were received.
This development may have particular relevance to companies involved in organising events. If you are affected by these changes, or have any questions particularly about the other VAT changes ongoing in Switzerland which are having impacts on existing procedures, please do not hesitate to get in touch.