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The Swiss Federal Council is consulting on plans to revise the Value Added Tax Ordinance (VATO), which clarifies the scope and coverage of the VAT regime.
The amendments are to bring the VATO into line with the partially revised Value Added Tax Act (VATA), adopted by the Swiss Parliament in September. The revised VATA and the Ordinance should enter into force on January 1, 2018.
The Swiss Federal Council explained that the Ordinance contains detailed regulations on the start and end of tax liability, for which a company's turnover (rather than just its Swiss turnover) is now decisive. It is also envisaged that companies that provide on Swiss territory only tax-exempt services will not need to be registered as taxpayers.
The revised Ordinance clarifies that, due to their large volumes of cross-border import-free tax consignments, distance-selling companies will now be liable to tax in Switzerland. They will be required to levy VAT on all their deliveries. If import tax is incurred in the process, this can be deducted according to the normal rules.
The ordinance defines the electronic newspapers, magazines, and books that will now be taxable at the reduced VAT rate. This is to distinguish them in particular from other electronic services such as paid access to databases, which will remain taxable at the normal rate. It will no longer be possible to deduct input tax on the acquisition of works of art and antiques that are considered to be collectors items. Margin taxation will be applicable upon resale.
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