The revision of the Swiss VAT law as per January 1, 2018 brings about important changes which may also have an effect on foreign companies.

Any business operating in Switzerland needs to evaluate carefully whether its taxable turnover might be subject to and may have to be registered for Swiss VAT. Currently, the minimum annual threshold for registering for Swiss VAT is CHF 100,000 for sales in Switzerland. After January 1, 2018, however, the minimum annual threshold of CHF 100,000 applies to sales world-wide. The purpose of this measure is to ensure a level playing field for all companies, especially those in the construction industry or the mail-order business.

It is important to note that in Switzerland – unlike the EU – construction work, maintenance, repair, installations and assembly are considered a supply of goods, even though no materials were supplied. The changes made to the Swiss VAT law will therefore have a special impact on companies involved in those areas, as they will have to verify their Swiss VAT liability as of the very first job on Swiss territory from now on.

For administrative ease and cost-effectiveness the Swiss Customs Administration does not levy an import tax on low-value goods (CHF 5 maximum tax). However, starting January 1, 2018, foreign businesses generating more than CHF 100,000 in sales from low-value goods shipped into Swiss territory will have to register for and pay Swiss VAT. The tax will need to be included on the invoice of every shipment. Foreign sellers must therefore make sure that they act as importers and represent themselves as such to the Swiss customs authorities.

VAT rates in Switzerland
A VAT rate of 8% is applicable to most goods and services.
Certain basic necessities are subject to a reduced rate of 2.5%, such as

• food and additives under the foodstuffs law,
• non-alcoholic beverages,
• printed matter and
• medication.

Hotel accommodation (including breakfast) is subject to a special rate of 3.8%.