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Swiss VAT Changes To Be Effective From January 1, 2018

by Ulrika Lomas, Tax-News.com, Brussels

21 December 2017


Numerous changes to Switzerland's value-added tax regime will occur from January 1, 2018, including to level the playing field for domestic companies compared with their online, overseas rivals.

Currently, foreign companies providing services in Switzerland do not have to pay VAT on Swiss turnover up to a CHF100,000 (USD103,726) threshold. This has led to competitive disadvantages for Swiss businesses, especially in the border regions.

Under the changes, a company's global turnover will be taken into account when calculating its liability to VAT. Companies with a global turnover of at least CHF100,000 will be liable to VAT from the first franc of turnover in Switzerland.

The system is to be delayed until January 1, 2019, for mail-order companies, on the grounds that Swiss Posts needs more time to implement the technical provisions of the new law. From 2019, mail-order companies will be liable to VAT if their annual turnover from import-tax-free small consignments is at least CHF100,000. These companies will be required to bill customers for VAT; customers will no longer have to pay the taxes and fees levied by Customs upon importation.

Other changes are to enter into force from January 1, 2018, including a reduced VAT rate for electronic newspapers, magazines, and books, and margin taxation for collectors' items.

Switzerland's value-added tax rate is to also fall to 7.7 percent from next year.

TAGS: compliance | VAT rates | tax | business | value added tax (VAT) | VAT legislation | VAT cross-border transactions | law | fees | legislation | Switzerland | services | VAT compliance matters | Other | Tax | BEPS

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