VAT in Switzerland

Switzerland: increased VAT liability for marketplaces?

July 21, 2020 in Distance Sales, VAT

Could there be increased VAT liability for marketplaces selling into Switzerland?

On 19 June 2020, the Swiss Federal Council opened a public consultation on amendments to the VAT law, which include an increased liability in the field of VAT for non-resident marketplaces selling into Switzerland.  

Since the latest amendments of the VAT law on distance sales into Switzerland, which came into effect on 1st January 2019, very few foreign companies have complied with their obligations and registered for Swiss VAT. Therefore, the Federal Council is looking at increasing the VAT reporting obligations for foreign distance sellers in Switzerland.  

Among other ambitious measures, the proposals from the Federal Council include:  

  • The VAT registration of online platforms who supply goods into Switzerland. 
  • A reduced VAT rate of 2.5% on menstrual products  
  • The possibility for the Swiss tax authorities to waive requiring the designation of a tax representative for foreign companies if the fulfillment of procedural obligations is guaranteed in another way 
  • Obligation for online platforms to provide information on companies that offer goods and services on the platform, particularly in the field of transport and accommodation. 
  • The possibility for the Federal Tax Administration to order an import ban or destruction at the border for goods sent by foreign companies or marketplaces which have failed to register for VAT or fail to meet their reporting obligations.  
  • To protect customers, the FTA may publish the names of non-compliant foreign sellers.  

These measures are only at proposal stage as it stands and would still require to go through the legislative process. They are unlikely to come into effect before 2023. 

If you have any concerns about distance selling into Switzerland, feel free to contact our team

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