Swiss Federal Council Adopts Partial Revision of Swiss VAT Ordinance

The Swiss Federal Council has approved a partial revision of the Ordinance on Value Added Tax (VVO), with the revised VAT Act set to take effect on January 1, 2025.

The revisions aim to streamline VAT processes and improve compliance. Key aspects of the changes include:

IMPLEMENTATION DATE:

• The partial revision of the VVO and the amended VAT Act will both come into effect on January 1, 2025.

KEY REVISIONS TO THE VAT ACT:

• Platform Taxation: New provisions for taxing digital platforms.

• Annual Settlement: Introduction of an annual VAT return option.

• Subsidies and Public Authority Cooperation: Changes aimed at improving cooperation and administration.

ADDITIONAL AMENDMENTS IN THE VVO:

• Net Tax Debt Rates and Flat Rates:

• Simplified Compliance: Taxpayers using net tax debt rates and flat rates will benefit from reduced administrative burdens and financial advantages if their input tax burden is lower than average.

• Limiting Tax Planning: New rules to minimize tax planning opportunities by correcting input tax deductions when changing settlement methods.

• Multiple Rates: Companies operating across various sectors can apply more than two net tax debt rates, allowing for more precise tax calculations.

ONLINE PORTAL REQUIREMENTS:

• Mandatory Use: Taxpayers will be required to use the Federal Department of Finance’s electronic portal for annual statements, net tax debt rates, flat rates, and group taxation.

• Non-Compliance: Applications and reports not submitted through the portal will be returned, with reminders issued. Temporary portal outages will not penalize taxpayers.

TRANSITIONAL PERIOD:

• Portal Use: The obligation to use the online portal for specific VAT procedures will officially start on January 1, 2027.

These revisions are aimed to simplify VAT compliance, reduce administrative burdens, and enhance the efficiency of tax processes in Switzerland.

SOURCE/ RECOMMENDED READ: 

• Federal Council adopts partial revision of the Ordinance on Value Added Tax (admin.ch)