Federal Act
on Value Added Tax
(Value Added Tax Act, VAT Act)

Any person, irrespective of legal form, objects and intention to make a profit, is liable to the tax if that person carries on a business and:

1. makes supplies on Swiss territory through that business; or

2. has their registered office, domicile or permanent establishment on Swiss territory.¹⁷

A person carries on a business if they:

1. independently perform a professional or commercial activity with the aim of sustainably earning income from supplies, irrespective of the amount of the inflow of funds that do not qualify as a consideration under Article 18 paragraph 2; and

2. act externally under their own name.¹⁸

The purchase, holding and sale of interests under Article 29 paragraphs 2 and 3 qualifies as a business activity.¹⁹

Exempt from tax liability under paragraph 1 is any person who:

1. within one year generates on Swiss territory and abroad turnover from supplies of less than 100,000 francs that are not exempt from the tax without credit under Article 21 paragraph 2;

2. carries on a business with registered office, domicile or permanent establishment abroad that exclusively makes one or more of the following types of supplies on Swiss territory irrespective of turnover:²⁰

   1. supplies exempt from the tax,

   1. 1bis. ²¹supplies exempt from the tax without credit,

   2. services whose place of supply in terms of Article 8 paragraph 1 is located on Swiss territory; not exempt from tax liability is, however, any person who supplies telecommunication or electronic services to recipients who are not liable to the tax,

   3. supplies of electricity in cables, gas via the natural gas distribution network and district heating to persons liable to the tax on Swiss territory;

3. ²²as a non-profit-making sports or cultural association run on a voluntary basis or as a non-profit-making organisation, generates less than 250,000 Swiss francs turnover within one year on Swiss territory and abroad from supplies that are not exempt from the tax without credit under Article 21 paragraph 2;

4. ²³operates a business with registered office, domicile or permanent establishment on Swiss territory that provides services on Swiss territory that are exclusively exempt from the tax without credit.²⁴

The turnover is calculated on the basis of the agreed considerations without the tax.²⁵

The place of business on Swiss territory and all domestic permanent establishments together represent a single taxable person.

Any person who carries on a business and is exempt from tax liability under Article 10 paragraph 2 or 12 paragraph 3 has the right to waive exemption from tax liability.

Exemption from tax liability must be waived for at least one tax period.

Among the public authorities, taxable persons are the autonomous agencies of the Confederation, cantons and communes and the other public law institutions.

Agencies may combine as a single taxable person. The combination may be elected for at the beginning of any tax period. It must be retained for at least one tax period.

A taxable person that is part of a public authority is exempt from tax liability as long as less than 100,000 francs turnover per year derive from taxable supplies to persons other than public authorities. The turnover is measured by the agreed considerations without the tax.²⁶

The Federal Council determines what supplies made by public authorities qualify as business activity and are therefore taxable.

Legal entities with their registered office, domicile or a permanent establishment in Switzerland which are closely associated with one another under the common management of a single legal entity may on application combine as a single taxable person (a VAT group). The group may also include legal entities which do not carry on a business, and individuals.²⁷

The decision to combine as a VAT group may be made for the beginning of any tax period. Termination of a VAT group is possible at the end of any tax period.

Tax liability commences:

• for businesses with registered office, domicile or permanent establishment on Swiss territory: with the commencement of the business activity;

• b. for all other businesses: on making a supply for the first time on Swiss territory.²⁸

Tax liability ends:

1. for businesses with registered office, domicile or permanent establishment on Swiss territory:

   1. on cessation of the business activity,

   2. on liquidation of assets: with the conclusion of the liquidation procedure;

2. for all other businesses: at the end of the calendar year in which a supply was made on Swiss territory for the last time.²⁹

Exemption from tax liability ends as soon as the total of the turnovers generated in the last financial year reaches the threshold in Article 10 paragraph 2 letters a or c or 12 paragraph 3, or it is foreseeable that the threshold will be exceeded within 12 months of commencing or extending the business activity.

Waiver of the exemption from tax liability may be declared at the earliest for the beginning of the current tax period.

If the qualifying turnover of the taxable person does not reach the turnover threshold under Article 10 paragraph 2 letters a or c or 12 paragraph 3 and it is expected that the qualifying turnover will also not be reached in the following tax period, the taxable person must de-register. De-registration is not possible before the end of the tax period in which the qualifying turnover is not reached. Failure to de-register is deemed to be waiver of the exemption from tax liability under Article 11. The waiver applies from the beginning of the following tax period.

Jointly and severally liable with the taxable person are:

1. partners in a simple partnership, a general or limited partnership within the scope of their civil law liability;

2. persons who voluntarily conduct or arrange an auction;

3. ³⁰any person or unincorporated entity, with the exception of pension schemes, that is a member of a VAT group (Art. 13) for all taxes payable by the group; if a person or unincorporated entity withdraws from the group, they are liable only for the tax claims that have arisen from their own business activity;

4. on transfer of a business: the previous tax debtor for three years after the announcement or reporting of the transfer for tax claims that arose before the transfer;

5. on termination of the tax liability of a wound-up legal entity, trading company or partnership without legal personality: the persons entrusted with the liquidation up to the amount of the liquidation surplus;

6. for the tax of a legal person that relocates its domicile abroad: the managing bodies up to the amount of the net assets of the legal entity;

7. ³¹in the cases referred to in Article 93 paragraph 1^bis: the managing bodies up to the amount of the security required.

The persons designated in paragraph 1 letters e and f are liable only for the tax, interest and cost claims which arise or fall due under their management; their liability lapses if they can prove that they have done everything that could reasonably be expected of them to ascertain and satisfy the tax claim.

Liability under Article 12 paragraph 3 of the Federal Act of 22 March 1974³² on Administrative Criminal Law (ACLA) is reserved.

If a taxable person assigns claims from their business to third parties, the latter are liable on a subsidiary basis for the VAT included in the assignment if at the date of the assignment, the tax debt due to the FTA has not yet arisen and a certificate of shortfall is available.³³

Sellers who supply goods via a digital platform shall be liable on a subsidiary basis for the tax due on these supplies by the person deemed to be the supplier under Article 20a.³⁴

The person jointly and severally liable has in proceedings the same rights and obligations as the taxable person.

The rights and obligations of a deceased taxable individual pass to that individual’s heirs. The heirs are jointly and severally liable for the taxes owed by the deceased up to the amount of their share of the estate, including amounts received in advance.

A person who takes over a business acquires the tax rights and obligations of their legal predecessor.

Satisfaction of the tax liability of foreign trading companies and foreign partnerships without legal personality is also the responsibility of their partners.

Domestic tax shall be levied on supplies made by taxable persons on Swiss territory for consideration; they are taxable unless this Act provides otherwise.

Due to the absence of any supply, the following flows of funds in particular do not qualify as a consideration:

1. subsidies and other public law contributions, even if they are paid on the basis of a public service agreement or a programme agreement pursuant to Article 46 paragraph 2 of the Federal Constitution;

2. funds that tourist offices receive exclusively from public law tourist charges and which they employ on behalf of public authorities for the public good;

3. contributions from cantonal water, sewage or waste funds to waste disposal institutions or waterworks;

4. donations;

5. contributions to businesses, in particular interest free loans, recapitalisation payments and written-off debts;

6. dividends and other profit shares;

7. contractually or legally regulated cost sharing payments that are paid by an organisational unit, in particular by a fund, to participants in a branch of the industry;

8. deposits in particular on packaging and containers;

9. payments of damages, satisfaction and the like;

10. remuneration for employment, such as board members' and trustees’ fees, remuneration of authorities or pay;

11. reimbursements, contributions to and allowances for supplies of goods delivered abroad that are exempt from the tax under Article 23 paragraph 2 number 1;

12. charges, contributions or other payments received for sovereign activities.

If a public authority expressly designates funds that it pays to the recipient as a subsidy or as another public law contribution, these funds shall be deemed to be a subsidy or another public law contribution within the meaning of paragraph 2 letter a.³⁵

Mutually independent supplies are treated separately.

Two or more mutually independent supplies that are aggregated into one unit or are offered as a combination of supplies may be treated as a unit according to the predominant supply if they are made against an aggregate consideration and the predominant supply represents by value at least 70 per cent of the aggregate consideration (combination).

Supplies that are economically closely related and interact with one another in such a way that they must be regarded as an indivisible whole qualify as a unitary economic transaction and must be treated according to the character of the aggregate supply.

Ancillary supplies, in particular packaging, are treated for tax purposes in the same way as the main supply.

A supply is deemed to be made by the person who appears to the outside world to be the supplier.

If a person acts in the name of and for account of another person, the supply is deemed to be made by the person represented if the representative:

1. can prove that they are acting as an agent and can clearly identify the person represented; and

2. the existence of an agency relationship is expressly notified to the recipient of the supply or is obvious in the circumstances.

If paragraph 1 applies in a triangular relationship, the supply relationship between the person appearing to the outside world and the person actually making the supply is qualified in the same way as the supply relationship between the person acting in relation to the outside world and the person receiving the supply.

Persons who facilitate a supply of goods in accordance with Article 3 letter d number 1 to be made with the aid of a digital platform by bringing sellers together with purchasers to conclude a contract on the platform shall be deemed to be a supplier in relation to the purchaser. In this case, there is a supply both between this person and the seller and between this person and the purchaser.

Persons who fulfil one or more of the following conditions shall not be deemed to be a supplier:

1. They are neither directly nor indirectly involved in the ordering process.

2. They do not generate turnover directly related to the business.

3. They only carry out the payment processing in connection with the supply.

4. They only provide space for advertisements.

5. They only provide advertising services.

6. They only redirect or forward purchasers to other electronic platforms.

A supply that is exempt from the tax without credit and for which taxation under Article 22 is not opted for is not taxable.

Exempt from the tax without credit are:

1. ³⁷the transport of letters that is included in the reserved services under Article 18 of the Postal Services Act of 17 December 2010³⁸;

2. ³⁹hospital treatment and medical treatment in human medicine hospitals, including closely related supplies made by hospitals, medical treatment and diagnostic centres, out-patient facilities and day hospitals. The dispensing of self-manufactured or bought-in artificial limbs and orthopaedic equipment is deemed to be a taxable supply of goods;

3. human medical treatment provided by doctors, dentists, psychotherapists, chiropractors, physiotherapists, naturopaths, midwives, nursing professionals or members of similar medical and nursing professions, provided the suppliers possess a licence to practise their profession: the Federal Council regulates the details. The dispensing of self-manufactured or bought-in artificial limbs and orthopaedic equipment is deemed to be a taxable supply of goods;

3. 3bis. ⁴⁰coordinated care services in connection with medical treatment;

4. the nursing care services supplied by nursing staff, nursing organisations and home aid (Spitex) or in homes, provided they are prescribed by a doctor;

5. the supply of human organs by recognised medical institutions and hospitals and of human whole blood by persons possessing the necessary licence;

6. the services of communities whose members are members of the professions listed in number 3, provided the services are supplied proportionately at cost price to the members for direct performance of their activities;

7. the transport of sick or injured persons or persons with disabilities in vehicles specially adapted for the purpose;

8. ⁴¹supplies provided by social assistance and social security institutions, supplies by nursing and home aid (Spitex) organisations and by retirement, residential and nursing homes;

9. supplies related to child and youth care provided by institutions specially fitted for the purpose;

10. supplies closely related to cultural and educational development of young people provided by charitable youth exchange organisations; young people within the meaning of this provision are persons up to the age of 25;

11. the following supplies in the field of education and training:⁴²

    1. ⁴³supplies in the field of the education of children and young people, of instruction, of training, of continuing education and training and of professional re-training, including instruction given by private teachers or at private schools,

    2. courses, lectures, and other events of a scientific or educational nature; lecturing activity is exempt from the tax without credit, irrespective of whether the fee is paid to the instructing person or that person’s employer,

    3. examinations carried out in the area of education,

    4. organisational services (including related ancillary services) provided by members of an institution that makes supplies exempt from the tax without credit under letters a–c, for this institution,

    5. organisational services (including related ancillary services) for agencies of the Confederation, cantons and communes that make supplies exempt from the tax without credit under letters a–c with or without consideration;

12. ⁴⁴the provision of staff by non-profit institutions for purposes of treating the sick, of social assistance and of social security, of child and youth care, of education and training and for religious and charitable purposes and for the common good;

13. supplies that non-profit institutions with political, trade union, economic, religious, patriotic, philosophical, philanthropic, ecological, sporting, cultural or civic objects provide to their members against a contribution laid down in statutes or regulations;

14. cultural services of the types listed below supplied directly to, or, if not supplied directly, immediately perceivable by the public:⁴⁵

    1. theatrical, musical and choreographic performances and film shows,

    2. ⁴⁶performances by actors, musicians, dancers and other performing artists, supplies from persons that make an artistic contribution to such performances, and supplies by fairground operators, including games of skill offered by the latter,

    3. visits to museums, galleries, monuments, historical sites and botanical and zoological gardens,

    4. services of libraries, archives and places for storing documents, in particular the permitting of inspection of text, sound and image carriers on their premises; however, the supply of goods (including lending for use) by such institutions is taxable;

14. 14bis. ⁴⁷considerations demanded for participation in cultural events (e.g. registration fees), together with the ancillary services included;

15. ⁴⁸considerations demanded for sporting events, including considerations for participation in such events (e.g. starting money), together with the ancillary services included;

16. ⁴⁹cultural services and the supply of cultural works by their creators, such as authors, composers, film makers, painters, sculptors, and services supplied by publishers and collecting societies in order to circulate these works; the foregoing also applies to derivative works under Article 3 of the Copyright Act of 9 October 1992⁵⁰ that are of a cultural nature;

17. ⁵¹supplies made at events such as bazaars, flea markets and raffles held by organisations that perform activities that are exempt from the tax without credit in the field of non-profit-making sports and cultural creativity, in the field of health care, social assistance and social security, and child and youth care, and by charitable nursing and home care (Spitex) organisations and by retirement, residential and nursing homes, provided the events serve the purpose of supporting these organisations financially and are held exclusively for their benefit; supplies provided by social assistance and social security organisations through second hand shops when the turnover thus generated is used exclusively for their benefit;

18. ⁵²in the insurance industry:

    1. insurance and reinsurance supplies,

    2. social insurance supplies,

    3. the following supplies in relation to social insurance and prevention campaigns:

       • – supplies made by social insurance schemes to each other

       • – supplies made by executive bodies as part of their statutory duty to run prevention campaigns

       • – supplies related to basic and continuing professional education and training,

    4. supplies within the scope of the activity as insurance agents or insurance brokers;

19. the following turnovers in the field of money and capital transactions:

    1. the granting and brokerage of credits and the management of credits by the lenders,

    2. the brokerage and assumption of liabilities, sureties and other securities and guarantees and the management of collateral by the lenders,

    3. turnovers, including those for brokerage, in deposits and current account transactions, in payment and transfer transactions, in business with money claims, cheques and other negotiable papers; however, the collection of debts on behalf of the creditor (debt enforcement business) is taxable,

    4. turnovers, including brokerage, relating to legal tender (domestic and foreign legal tender, such as currency, bank notes, coins); taxable, however, are collectors’ items (bank notes and coins) that are normally not used as legal tender,

    5. turnovers (spot and forward transactions), including brokerage, of securities, rights and derivatives and of interests in companies and other forms of association; however, the safe-keeping and the management of securities, rights and derivatives and of interests (especially security deposits) including fiduciary investments are taxable,

    6. ⁵³offering units in collective investment schemes in accordance with the Collective Investment Schemes Act of 23 June 2006⁵⁴ (CISA) and the management of collective investment schemes in accordance with CISA by persons who manage such schemes or are responsible for the safekeeping of the assets held in them, fund management companies, custodian banks and their agents; agents are regarded as any natural persons or legal entities that may be delegated tasks by collective capital investment schemes in accordance with the CISA or the Financial Institutions Act of 15 June 2018⁵⁵; the offering of units and the management of investment companies with fixed capital in accordance with Article 110 CISA is governed by letter e,

    7. ⁵⁶the offering of investment groups by investment foundations in accordance with the Federal Act of 25 June 1982⁵⁷ on Occupational Old-Age, Survivors' and Invalidity Pension Provision (OPA) and the management of investment groups in accordance with the OPA by persons who manage such groups or are responsible for the safekeeping of the assets held in them, the custodian banks and their agents; agents are deemed to be any natural persons or legal entities to whom the investment foundations may delegate tasks;

20. the transfer and the creation of rights in rem in immovable property and the supplies of communities of condominium owners to the condominium owners, to the extent the supplies consist of the provision of the communal property for use, its maintenance, its repair and other management and the supply of heating and similar goods;

21. the provision of immovable property and parts of immovable property for use or exploitation; taxable, however, are:

    1. the renting of residential and sleeping accommodation for guests and the renting of halls and rooms in hotels and restaurants,

    2. the renting of camping sites,

    3. the renting or leasing of non-public places for parking motor vehicles, unless it is a non-independent service ancillary to another property rental exempt from the tax without credit,

    4. the renting and leasing of immovable equipment and machines belonging to an operating facility, but not to a sports facility,

    5. the renting of safe deposit boxes,

    6. the renting of exhibition stands and individual rooms in exhibition and congress buildings;

22. the supply of postal stamps valid on Swiss territory and other official stamps up to their printed value;

23. ⁵⁸turnovers from gambling, to the extent that the gross gaming income is subject to the casino tax under Article 119 of the Gambling Act of 29 September 2017⁵⁹ or the net profit achieved thereby is used in full for charitable purposes within the meaning of Article 125 of the said Act;

24. the supply of used movable goods, which were used exclusively for the provision of supplies exempt by this article from the tax without credit;

25. ⁶⁰…

26. the sale of agricultural, forestry and market garden products cultivated in their own business by farmers, foresters or gardeners, the sale of cattle by cattle dealers, and the sale of milk by milk collection points to milk processing plants;

27. publicity services, which charitable organisations provide for the benefit of third parties or third parties for the benefit of charitable organisations;

28. ⁶¹supplies:

    1. between organisational units within the same public authority,

    2. between private or public law companies owned wholly by public authorities and the public authorities that own them or their organisational units,

    3. ⁶²between institutions or foundations that have been established or are run exclusively by public authorities and these public authorities and their organisational units;

28. 28bis. ⁶³the provision of staff by public authorities to other public authorities;

29. the exercise of arbitration functions;

30. ⁶⁴supplies between education and research institutions that are involved in education and research cooperation, provided those supplies are made as part of the cooperation, irrespective of whether the education and research cooperation is liable to value added tax;

31. ⁶⁵travel services retailed by travel agents and related travel agency services.

Whether a supply mentioned in paragraph 2 is exempt from the tax without credit is determined, subject to paragraph 4, exclusively by its nature and regardless of who makes or receives the supply.

If a supply in paragraph 2 is exempt from the tax without credit based on the attributes either of the supplier or of the recipient of the supply, the exception applies only for supplies that are provided or received by a person with these attributes.

The Federal Council shall specify in more detail the supplies exempt from the tax without credit; in doing so it shall observe the principle of competitive neutrality.

Organisational units of a public authority under paragraph 2 number 28 are its agencies, its private and public companies, provided no other public authority or other third parties participate therein, and its institutions and foundations, provided the public authority founded them without the participation of other public authorities or other third parties.⁶⁶

The Federal Council shall determine which institutions are deemed to be education and research institutions under paragraph 2 number 30.⁶⁷

The taxable person may, subject to paragraph 2, tax any supply exempt from the tax without credit (option), provided the tax is clearly detailed or a declaration is made on the tax return.⁶⁸

The option is excluded for:

1. supplies under Article 21 paragraph 2 numbers 18, 19 and 23;

2. ⁶⁹supplies under Article 21 paragraph 2 numbers 20 and 21 if the good is used or is intended to be used by the recipient exclusively for private residential purposes.

If a supply is exempt from the tax under this article, domestic tax is not payable on the supply.

Exempt from the tax are:

1. the supply of goods, unless provided for use or exploitation, that are transported or dispatched directly abroad;

2. ⁷⁰the provision for use or exploitation, in particular the leasing or chartering of goods, provided the goods are predominantly used abroad by the recipient of the supply itself;

3. ⁷¹the supply of goods that were demonstrably subject to customs control on Swiss territory in connection with a transit procedure (Art. 49 CustA⁷²), a customs warehousing procedure (Art. 50–57 CustA), a temporary admission procedure (Art. 58 CustA), or inward processing procedure (Art. 59 CustA), provided the procedure was concluded in the proper manner or with subsequent approval from the Federal Office for Customs and Border Security (FOCBS);

3. 3bis. ⁷³the supply of goods which because of storage in a bonded warehouse (Art. 62–66 CustA) were demonstrably subject to customs control on Swiss territory and which have not retrospectively lost this customs status;

4. the movement or arranging for the movement of goods abroad for reasons unrelated to a supply of goods;

5. the transport or dispatch of goods in connection with the import of goods and all related supplies as far as the destination to which the goods are to be transported at the time the tax debt is incurred under Article 56; if no tax debt is incurred, the decisive time is governed by Article 69 CustA by analogy;

6. the transport or dispatch of goods and all related supplies in connection with the export of goods released for free circulation under customs law;

7. ⁷⁴transport services and ancillary logistic activities, such as loading, unloading, trans-shipment, clearing or temporary warehousing:

   1. in which the place of supply of the service under Article 8 paragraph 1 is on Swiss territory, although the service itself is exclusively supplied abroad, or

   2. which are supplied in connection with goods subject to customs control;

8. the supply of aircraft to airlines that carry on air transport and charter business commercially and whose turnovers from international flights exceed those from domestic traffic; the refurbishment, maintenance and servicing of aircraft which airlines have acquired as part of a supply of goods; the supply, maintenance and servicing of goods built into these aircraft or of goods for their operation; the supply of goods for the maintenance of these aircraft and services that are destined for the immediate needs of these aircraft and their loads;

9. the services of intermediaries acting expressly in the name of and for account of others, provided the brokered supply is either exempt from the tax under this article or is effected exclusively abroad; if the brokered supply is effected both on Swiss territory and abroad, that part of the brokerage that relates to supplies abroad or supplies that are exempt from the tax under this article is exempt from the tax;

10. the supply of services in their own name by travel agents and organisers of events, to the extent they make use of supplies of goods and services by third parties that are provided abroad; if these supplies by third parties are provided both on Swiss territory and abroad, only that part of the service of the travel agent or of the organiser that relates to supplies abroad is exempt from the tax;

11. ⁷⁵the supply of goods under Article 17 paragraph 1^bis CustA to persons departing abroad or arriving from abroad by air.

12. ⁷⁶Turnover generated by gold and alloys of gold of the following form:

    1. government minted gold coins under tariff headings 7118.9010, 9705.3100 and 9705.3900⁷⁷,

    2. gold for investment purposes with a minimum standard of fineness of 995 thousandths, in the form of:

       • cast ingots bearing an indication of fineness and the mark of a recognised assayer-melter, or

       • stamped slabs bearing an indication of fineness and the hallmark of a recognised assayer-smelter or a responsibility mark registered in Switzerland,

    3. gold in the form of granules with a minimum fineness of 995 thousandths, packed and sealed by a recognised assayer-melter,

    4. gold in unwrought form or in the form of semi-finished products intended for refining or recovery, and gold in the form of waste and scrap,

    5. alloys of gold referred to in letter d, provided they contain two per cent or more by weight of gold or, if they contain platinum, more gold than platinum;

13. ⁷⁸the supply of goods by a seller facilitated by means of a digital platform, provided that the person who facilitated the supply of goods is deemed to be a supplier under Article 20a and is entered in the register of taxable persons.

A direct export under paragraph 2 number 1 is constituted if the good supplied is exported abroad or to an open customs warehouse or bonded warehouse without being used on Swiss territory. In serial transactions, the direct export extends to all suppliers involved. The good supplied may, prior to export, be processed or finished by agents of the non-taxable customer.

The Federal Council may, in order to safeguard competitive neutrality, exempt transport in cross-border air, rail or bus traffic from the tax.

The Federal Department of Finance (FDF) shall regulate the conditions by which domestic supplies of goods to foreign tourists are exempt from the tax if being exported by these tourists and shall specify the evidence required. Proof may be provided in electronic form.⁷⁹

The tax is calculated on the consideration actually received. The consideration includes in particular the reimbursement of all costs, even if they are invoiced separately, and the public law charges payable by the taxable person. Paragraphs 2 and 6 remain reserved.

For supplies to closely related persons (Art. 3 let. h), the consideration is deemed to be the amount that would be agreed between independent third parties.

For barter transactions, the market value of each supply is deemed to be the consideration for the other supply.

For exchange repairs, the consideration covers only the wage for the work carried out.

For supplies made in lieu of payment, the consideration is deemed to be the amount which is thereby satisfied.

If a person is deemed to be a supplier in accordance with Article 20a, the consideration for the supply which that person has facilitated shall be equal to the value which they have communicated to the purchaser of the goods.⁸⁰

Not included in the assessment basis are:

1. ticket taxes, immovable property transfer taxes and the VAT itself payable on the supply;

2. amounts that the taxable person receives from the person receiving the supply as reimbursement of outlays made in the name and for the account of the taxable person, provided they are detailed separately (transitory items);

3. the portion of the consideration that, on sale of an immovable good, relates to the value of the land;

4. the cantonal contributions to water, sewage or waste funds included in the price of disposal and supply services, to the extent that these contributions are used by these funds to pay contributions to disposal organisations or waterworks.

If the person liable to tax has acquired collectors’ items such as works of art, antiques and suchlike, in order to calculate the tax, they may deduct the purchase price from selling price provided they have not deducted input tax from the purchase price (margin taxation). If the purchase price is higher than the selling price, the loss may be set off, in that the difference is deducted from taxable turnover.

If such collectors’ items are imported by the reseller, the import tax paid may be added to the purchase price.

A person is deemed to be a reseller if they act for their own account or for the account of another on the basis of a purchase or sales commission agreement.

The Federal Council shall determine what is deemed to be a collectors’ item.

If two or more collectors’ items are purchased for an overall price, the tax may be calculated on the basis of the total difference between the overall selling price and the overall purchase price. The Federal Council shall regulate the requirements.

The tax rate is 8.1 per cent (standard rate), subject to paragraphs 2 and 3.⁸²

The reduced tax rate of 2.6 per cent applies to:⁸³

• a. the supply of the following goods:

  1. tap water,

  2. ⁸⁴foodstuffs under the Foodstuffs Act of 20 June 2014⁸⁵, with the exception of alcoholic beverages,

  3. cattle, poultry, fish,

  4. grains,

  5. seeds, planting roots and bulbs, living plants, cuttings, scions and cut flowers and branches, including those used in arrangements bouquets, wreaths, etc.; if invoiced separately, the supply of these goods is also subject to the reduced tax rate, even if it is made in combination with a supply taxable at the standard rate,

  6. animal feed, silage acids, scatterings for animals,

  7. fertilisers, pesticides, mulch and other vegetation used as covering material,

  8. medication,

  9. newspapers, magazines, books and other printed matter without advertising character of the kinds to be stipulated by the Federal Council,

  10. ⁸⁶products for menstrual hygiene;

• abis. ⁸⁷electronic newspapers, magazines and books without advertising character as defined by the Federal Council;

• b. the supply of services of radio and television companies, with the exception of services of a commercial nature;

• c. the supplies under Article 21 paragraph 2 numbers 14–16;

• d. agricultural supplies that consist of land cultivation directly related to initial production or cultivation of initial production products connected with the land.

For foodstuffs that form part of restaurant supplies, the standard rate applies. A restaurant supply is the serving of foodstuffs provided the taxable person prepares or serves the foodstuffs on the customer’s premises or the taxable person maintains special installations for their consumption on the spot. If foodstuffs, with the exception of alcoholic beverages, are destined to be taken away or for delivery, the reduced tax rate applies provided suitable organisational measures are taken to differentiate these supplies from restaurant supplies; if this is not the case, the standard rate applies. Where foodstuffs, with the exception of alcoholic beverages, are offered in vending machines, the reduced tax rate applies.⁸⁸

The tax on accommodation services is 3.8 per cent (special rate).⁸⁹ The special rate applies until 31 December 2020 or, in the event that the time limit in Article 196 number 14 paragraph 1 of the Federal Constitution is extended, until 31 December 2027 at the latest. An accommodation service is the provision of accommodation, including the serving of breakfast, even if it is invoiced separately.⁹⁰

The Federal Council shall specify in greater detail the goods and services designated in paragraph 2; in doing so it shall observe the principle of competitive neutrality.

The supplier must on request issue the recipient of the supply with an invoice that satisfies the requirements of paragraphs 2 and 3.

The invoice must clearly identify the supplier, the recipient and the nature of the supply and as a rule contain the following elements:

1. ⁹¹the name and the location of the supplier in the form which the supplier uses in business transactions, a note that they are registered as a taxable person and the number under which they are entered in the Register of Taxable Persons;

2. the name and location of the recipient of the supply in the form in which they use in business transactions;

3. the date or period of the provision of the supply, in the event that it differs from the invoice date;

4. the nature, object and extent of the supply;

5. the consideration for the supply;

6. the applicable tax rate and the tax amount payable on the consideration; if the consideration includes the tax, details of the applicable tax rate suffice.

On invoices issued by automatic tills (receipts), information on the recipient of the supply need not be included provided the consideration disclosed on the receipt does not exceed an amount laid down by the Federal Council.

Persons not entered in the Register of Taxable Persons or who use the notification procedure according to Article 38 may not include VAT details on invoices.

Persons who include VAT details on an invoice when not entitled to do so, or who detail too high a tax for a supply, shall owe the tax detailed unless:

1. the invoice is corrected in accordance with paragraph 4; or

2. ⁹²they show probable cause that the Confederation has not suffered a loss of tax; tax is not lost if the recipient of the invoice has not made an input tax deduction or if the input tax claimed has been repaid to the Confederation.

The legal consequences of paragraph 2 also apply to credit notes, unless the recipient of the credit note contests in writing the tax detailed without authorisation or the excessive tax amount.⁹³

An invoice may be subsequently corrected within the period permitted by commercial law by a document requiring acknowledgement of receipt, which refers to and revokes the original invoice.

The taxable person may in the course of their business activity, subject to Articles 29 and 33, deduct the following input taxes:

1. the domestic tax invoiced to them;

2. the acquisition tax that they have declared (Art. 45–49);

3. the import tax paid or payable by them which has been assessed unconditionally or has been assessed conditionally and fallen due as well as the tax declared by them for the import of goods (Art. 52 and 63).

If the taxable person has, in the course of a business activity entitling them to make an input tax deduction, procured agricultural, forestry or market garden products, cattle or milk from non-taxable farmers, foresters, gardeners, cattle dealers or milk collectors, they may deduct as input tax 2.6 per cent of the amount invoiced.⁹⁴

Deduction of the input tax under paragraph 1 is permissible if the taxable person proves that they have paid the input tax.⁹⁵

The taxable person may deduct notional input tax if:

1. they acquire an individualisable moveable good in the course of a business activity entitling them to make an input tax deduction; and

2. the VAT on acquisition of the good has not been openly passed on to them.

The notional input tax is calculated on the basis of the amount paid by the taxable person. The amount paid is regarded as including the tax at the tax rate applicable at the time of acquisition.

No notional input tax may be deducted in respect of goods subject to margin taxation under Article 24a.

There is no right to make an input tax deduction on supplies and the import of goods which are used to make supplies that are exempt without credit from the tax and where the option for their taxation has not been exercised.

An input tax deduction for supplies made abroad is permitted to the same extent as if they had been made on Swiss territory and taxation had been opted for under Article 22.⁹⁷

An input tax deduction is permitted for travel services retailed by travel agents and the related services of the travel agents if the services are provided or used abroad.⁹⁸

Notwithstanding paragraph 1, there is a right to make an input tax deduction in the course of a business activity entitling the taxable person to make an input tax deduction for the purchase, holding and sale of interests and for reorganisations as defined by Article 19 or 61 of the Federal Act of 14 December 1990⁹⁹ on Direct Federal Taxation (DFTA).

Interests are participations in the capital of other businesses that are held with the intent of long-term investment and confer significant influence. Participations of at least 10 per cent in the capital are deemed to be an interest.

In order to ascertain the deductible input tax, holding companies may base their calculation on the business activity of the businesses held by them that gives rise to the right to make an input tax deduction.¹⁰⁰

If the taxable person also uses goods, parts thereof or services outside their business activity, or uses the same within their business activity both for supplies entitling the taxable person to make an input tax deduction and for supplies that are excluded from input tax deduction, the taxable person must correct the input tax deduction in proportion to their use.

If such a pre-supply is predominantly used in the course of the business activity involving supplies entitling the taxable person to make an input tax deduction, the input tax may be deducted in full and corrected at the end of the tax period (Art. 31).

If the conditions for input tax deduction are subsequently not fulfilled (own use), the input tax deduction must be corrected at the point in time at which the conditions are no longer fulfilled. The input tax previously deducted, including the parts corrected as a subsequent input tax deduction, must be repaid.

Own use occurs in particular where the taxable person withdraws goods or services permanently or temporarily from their business, provided on procurement or contribution of the whole or of its components they have made an input tax deduction or they have procured the goods or services under the notification procedure in accordance with Article 38 which:

1. they use outside their business activity, in particular for private purposes;

2. they use for a business activity which does not entitle them to make the input tax deduction under Article 29 paragraph 1;

3. they hand over without consideration, without there being a business reason; in the case of gifts of up to 500 francs per person and year and of advertising gifts and samples with the aim of realising turnovers taxable or exempt from the tax, a business reason will be presumed automatically;

4. on the cessation of tax liability are still subject to their right of disposal.

If in the period between the receipt of the supply and the non-fulfilment of the conditions for the input tax deduction, the good or service was put to use, the input tax deduction must be corrected in the amount of the fair value of the good or the service. To determine the fair value, the input tax amount is reduced on a straight-line basis for every year that has expired by a fifth for movable goods and for services, and by a twentieth for immovable goods. The accounting treatment is of no significance. The Federal Council may, in justified cases, stipulate departures from the depreciation rules.

If a good is used only temporarily outside the business activity or for a business activity not entitling the taxable person to make an input tax deduction, the input tax deduction must be corrected based on the amount of the tax that would be due on the rent that an independent third person would charge therefor.

If the conditions for the input tax deduction arise later (subsequent input tax deduction), the input tax deduction may be made in the reporting period in which the conditions arose. The input tax not deducted earlier, including the portion corrected for own use, may be deducted.

If the good or the service was put into use in the time between receipt or import of the supply and the occurrence of the conditions for the input tax deduction, the deductible input tax is limited to the fair value of the good or the service. To determine the fair value, the input tax amount is reduced on a straight-line basis for every year that has expired by a fifth for movable goods and for services, and by a twentieth for immovable goods. The accounting treatment is of no significance. The Federal Council may, in justified cases, stipulate departures from the depreciation rules.

If a good is used only temporarily outside the business activity or for a business activity not entitling the input tax deduction, the input tax deduction must be corrected based on the amount of the tax that would be due on the rent that an independent third person would charge therefor.

Flows of funds that are not deemed to be consideration (Art. 18 para. 2), do not result in a reduction of the input tax deduction, subject to paragraph 2.

The taxable person must reduce their input tax deduction proportionately if they receive money under Article 18 paragraph 2 letters a–c.

The FTA is responsible for the imposition and the collection of the domestic and the acquisition tax.

In order to ensure that the tax is imposed and collected in accordance with the law, the FTA shall issue all the necessary instructions, unless the issue of such is expressly reserved to another authority.

It publishes without delay all good practice regulations that are not exclusively of an internal administrative nature.

All administrative acts must be carried out expeditiously.

The taxable person may be burdened by the tax imposition only to the extent this is absolutely necessary for enforcement of this Act.

The Federal Council may stipulate the electronic conduct of procedures under this Act. In doing so, it shall regulate the modalities of such conduct.

The FTA shall ensure the authenticity and integrity of the data in electronic procedures.

For the electronic filing of submissions whose signature is required by law, it may accept a different electronic confirmation of the information by the person submitting it from a qualified electronic signature.

Persons who are taxable under Article 10 must register with the FTA of their own accord in writing within 30 days of the commencement of their tax liability. The Administration shall issue them with a non-transferable number in accordance with the requirements of the Federal Act of 18 June 2010¹⁴⁸ on the Business Identification Number, which is registered.¹⁴⁹

If tax liability ends in accordance with Article 14 paragraph 2, the taxable person must de-register with the FTA in writing within 30 days of the end of the business activity, and at the latest on conclusion of the liquidation proceedings.

Persons who become taxable solely because of the acquisition tax (Art. 45 para. 2) must register with the FTA in writing within 60 days of the end of the calendar year in which they are liable for tax and at the same time declare the supplies procured.

Taxable persons without a domicile, registered office or permanent establishment on Swiss territory must appoint a representative to perform their procedural obligations who has their domicile or registered office in Switzerland.¹⁵⁰

The FTA may dispense with the appointment of a representative in accordance with paragraph 1 provided the fulfilment of the procedural obligations by the taxable person and the prompt enforcement of this Act are guaranteed in another way; the foregoing is subject to any specific statutory provisions that may apply.¹⁵¹

In the case of group taxation (Art. 13), the VAT group must appoint a representative domiciled or with place of business in Switzerland to fulfil their procedural obligations.

The appointment of a representative under paragraphs 1 and 2 does not constitute a permanent establishment in accordance with the direct tax provisions.

The taxable person must provide the FTA in good faith with information on all matters that to the best of their knowledge and belief could be of significance to tax liability or for assessment of the tax, and must submit the documents required.

Professional confidentiality as protected by law is reserved. Persons subject to professional confidentiality are obliged to open their books or records, but may conceal the names and addresses of their clients or replace them with codes, but not their domicile, registered office or permanent establishment. In cases of doubt, at the request of the FTA or of the taxable person, the president of the competent chamber of the Federal Administrative Court shall appoint neutral experts as controlling bodies.

In response to a written enquiry made by the taxable person about the VAT consequences of a specific set of circumstances, the FTA shall provide information within a reasonable period. The information is legally binding on the enquiring taxable person and the FTA; it may not be used in relation to any other set of circumstances.

The taxable person must keep their books of account and records in accordance with the principles of commercial law. The FTA may in exceptional cases impose more extensive recording obligations if this is essential for proper imposition of the VAT.

The taxable person must retain in a proper manner their books of account, receipts, business documents and other records until the right to establish the tax claim has prescribed (Art. 42 para. 6). Articles 958f of the Code of Obligations¹⁵² applies.¹⁵³

Business documents that are required in connection with the calculation of a subsequent input tax deduction and own use of immovable goods must be retained for 20 years (Art. 31 para. 3 and 32 para. 2).

The Federal Council shall stipulate the conditions under which receipts that are necessary under this Act for enforcement of the tax may be transmitted and retained in paperless form.

The taxable person must of their own accord file a return in respect of the tax claim in the prescribed form to the FTA within 60 days of the end of the reporting period.

If the tax liability ends, the period runs from this date.

If the taxable person discovers errors in their tax returns in the course of drawing up their annual accounts, they must correct them at the latest in the return for the reporting period in which the 180th day after the end of the relevant business year falls.

The taxable person is obliged to retrospectively correct recognised errors in returns relating to past tax periods unless the tax claims for these tax periods have become legally binding or have prescribed.

The retrospective corrections of the returns must be notified in the form specified by the FTA.

In the case of system-based errors that are difficult to ascertain, the FTA may grant the taxable person facilities under Article 80.

Third parties obliged to provide information under paragraph 2 must at the request of the FTA and free of charge:

1. provide all information that is necessary to establish tax liability or to calculate the tax claim against a taxable person;

2. permit the inspection of books of account, receipts, business documents and other records if the required information is not available from the taxable person.

A third party obliged to provide information is a person who:

1. could be a taxable person;

2. is liable for the tax in addition to or instead of the taxable person;

3. has received or supplied goods or services;

4. holds a qualifying interest in a company subject to group taxation;

5. ¹⁵⁴brings together suppliers and supply recipients with the aid of a digital platform.

Professional confidentiality as protected by law is reserved.

The provisions of the APA¹⁸⁵ apply. Article 2 paragraph 1 APA does not apply to the VAT procedure.

The authorities shall establish the legally relevant circumstances ex officio.

The principle of the free consideration of evidence applies. It is not permissible to make proof dependent on the production of specific evidence.

The FTA shall issue ex officio or on application of the taxable person all rulings necessary for the imposition of the tax, in particular if:

1. the existence or scale of the tax liability is disputed;

2. the registration or de-registration in the Register of Taxable Persons is disputed;

3. the existence or amount of the tax claim, of joint liability or of the entitlement to a refund of taxes is disputed;

4. the taxable person or persons jointly liable fail to pay the tax;

5. other obligations arising under this Act or from ordinances based on it are not recognised or not fulfilled;

6. in a specific case and as a precautionary measure it is ordered or appears necessary to establish the tax liability, the tax claim, the principles for the assessment of the tax, the applicable tax rate or joint liability.

Written notice of rulings shall be given to the taxable person. Notice must include instructions on the right of appeal and an appropriate statement of the grounds for the ruling.

Rulings of the FTA may be contested by filing opposition within 30 days of notification.

Opposition must be filed with the FTA in writing. It must contain the petition, the grounds for opposition citing the evidence and the signature of the opposing party or of their representative. The representative must provide proof of identity by written power of attorney. The evidence must be described in the letter of opposition and enclosed with it.

If the requirements of the opposition procedure are not satisfied or if the petition or its grounds lack the necessary clarity, the FTA shall grant the opposing party a short period to revise the same. It shall combine this additional period with the warning that if the period expires unused, a decision will be made based on the files or, if the petition, grounds, signature or power of attorney is not provided, that the opposition will not be considered.

If opposition is raised against a properly justified ruling of the FTA, on application or with the consent of the opposing party it must be forwarded as an objection to the Federal Administrative Court.

The opposition procedure must be continued despite withdrawal of opposition if there are indications that the contested ruling does not comply with the applicable provisions of the law.

In general, no costs are charged in ruling and opposition procedures. No legal costs are awarded.

Regardless of the outcome of the proceedings, procedural costs may be imposed on the person or authority that culpably caused them.

The review, explanation and correction of assessment notices, rulings and opposition decisions of the FTA are governed by Articles 66–69 APA¹⁸⁶.

The taxable person must settle the tax claim that arose in the reporting period within 60 days of the end of that period.

If the taxable person makes no payment or a payment that is obviously insufficient, the FTA, after issuing a reminder, shall seek to enforce its claim for the tax amount provisionally payable for the reporting period in question. If no return has been filed for the taxable person or the return is obviously inadequate, the FTA shall first make an assessment according to its best judgement of the tax amount provisionally payable.

By rejecting the summons for payment, the taxable person instigates the procedure to continue enforcement proceedings. The FTA is responsible for setting aside the rejection of the summons for payment in the ruling and opposition procedure.

The ruling on the rejection of the summons for payment may be contested by filing opposition with the FTA within 10 days of it being issued. The opposition decision is final, subject to paragraph 5.

If the tax amount provisionally payable that is the subject of the enforcement proceedings is the result of an assessment made by the FTA according to its best judgement, an objection may be filed in the Federal Administrative Court against the opposition decision. The objection has no suspensive effect, unless the court so orders on justified application. The Federal Administrative Court makes the final decision.

Article 85a of the Federal Act of 11 April 1889¹⁸⁷ on Debt Enforcement and Bankruptcy (DEBA) does not apply.

The collection of a tax amount under paragraph 2 does not affect the final tax claim under Articles 72, 78 and 82 from being established. If the tax claim cannot be established due to a failure of the taxable person to act, in particular because they fail to correct errors under Article 72 or to request a ruling under Article 82, on the prescription of the right to establish the tax, the tax amounts established by the FTA under paragraph 2 become the tax claim.¹⁸⁸

Instead of a payment of the tax amount, the taxable person may provide security in accordance with to Article 93 paragraph 7.

Immediately after receipt of the payment or the security, the FTA shall withdraw its debt enforcement claim.

Paragraphs 1-9 apply regardless of which reporting period has been chosen.¹⁸⁹

In the case of annual reporting (Art. 35a), the tax shall be collected on a provisional basis by paying in instalments that are determined and invoiced by the FTA.

The tax claim in the last tax period is decisive in determining the instalments. If it is not yet known, it is estimated by the FTA. In the case of new taxable persons, the tax claim expected by the end of the first tax period is decisive.

If the effective reporting method (Art. 36) or the flat tax rate method (Art. 37 para. 5) is used, one instalment shall amount one quarter of the tax claim, and in the case of reporting using the net tax rate method (Art. 37 paras. 1-4), one instalment shall amount to half of the tax claim in accordance with paragraph 2.

No negligible amounts will be charged.

A taxable person who considers the instalments to be too high or too low may apply to the FTA for an adjustment.

The instalments shall be paid:

1. when applying the effective reporting method and the flat tax rate method: within 150, 240 and 330 days of the beginning of the tax period;

2. in the case of reporting using the net tax rate method: within 240 days of the beginning of the tax period.

The instalments paid shall be credited against the tax claim according to the submitted annual return.

In the event of late payment, interest is payable without reminder.

In the case of provisional tax collection under the annual reporting method, interest is payable on the amount due without a reminder if the taxable person pays the instalments after the deadline or does not pay them in full.¹⁹¹

Interest on late payment is not payable on an additional charge if it is the result of an error which, if it had been correctly processed, would not have led to loss of tax for the Confederation.

If the tax return or the instalments paid against the tax claim result in a surplus in favour of the taxable person, this shall be reimbursed to the taxable person.¹⁹²

The foregoing paragraph does not apply in the event of:

1. the set-off of this surplus against import tax liabilities, even if they are not yet due;

2. the use of the surplus as security for tax under Article 94 paragraph 1;

3. the use of the surplus for set-off among federal agencies.

The taxable person may reclaim taxes paid but not due if the tax claim is not yet legally binding.¹⁹³

If the surplus under paragraph 1 or the refund under paragraph 3 is paid out later than 60 days after receipt of the tax return or of the written claim to the entitlement by the FTA, interest shall be paid on the amount due for the period from the 61st day until payment or refund.

If the claim for tax, interest, costs and fines is not satisfied, the FTA shall instigate debt enforcement proceedings and take whatever civil and enforcement measures that serve the purpose.

If the tax claim is not yet legally binding and if it is disputed, the FTA shall issue a ruling. Until a legally binding ruling is issued, the final ranking of creditors is suspended.¹⁹⁴

By rejecting the summons for payment, the taxable person instigates the procedure to continue enforcement proceedings. The FTA is responsible for setting aside the rejection of the summons for payment.

…¹⁹⁵

The FTA must register the tax claim in the public inventories or on public notices to creditors.¹⁹⁶

The taxes incurred in the context of enforcement proceedings represent exploitation costs.

The FTA may in justified cases waive the collection of the tax if the enforcement proceedings are not expected to be successful.

If payment of the tax, interest and costs within the prescribed period causes the taxable person significant hardship, the FTA and the taxable person may agree on an extension of the payment period or on instalment payments.

Payment facilities may be made subject to the provision of appropriate security.

Payment facilities lapse if the requirements lapse or if the conditions to which they are tied are not fulfilled.

The submission of an application for an agreement on payment facilities does not lead to the suspension of enforcement proceedings.

The right to enforce the tax claim, interest and costs prescribes five years from the time when the corresponding claim becomes legally binding.

The prescriptive period is suspended as long as the taxable person cannot be proceeded against in Switzerland.

The prescriptive period is interrupted by every action requesting payment and every moratorium by the FTA and by every assertion of the claim by the taxable person.

Interruption and suspension are effective towards all persons liable for payment.

Prescription applies in any event ten years after the end of the year in which the claim became legally binding.

If a certificate of shortfall is issued in respect of a tax claim, the prescriptive period for collection is governed by the provisions of the DEBA¹⁹⁷.

The FTA may abate bindingly assessed taxes in whole or in part if the taxable person:

1. has for an excusable reason not invoiced and collected the tax, a retroactive transfer is not possible or reasonable and payment of the tax would result in serious hardship;

2. owes the tax simply as a result of not observing formal regulations or of processing errors and it is obvious or the taxable person proves that there is no loss of tax for the Confederation; or

3. for an excusable reason could not fulfil their assessment obligations, but can prove or show credibly in retrospect that the assessment according to its best judgement undertaken by the FTA is too high; in this case tax abatement is possible only up to the amount over-assessed.

The FTA may also consent to a tax abatement or waive security for its claim in composition proceedings.

The request for abatement must be justified in writing and be submitted to the FTA together with the necessary evidence. There is no right of opposition to the ruling of the FTA. An objection may be filed against the ruling in the Federal Administrative Court.

The submission of a request for a tax abatement does not lead to the suspension of enforcement proceedings for legally assessed taxes.

The tax abatement procedure is free of cost. However, costs may be imposed in full or in part on the person submitting the request if they have submitted an obviously unjustified request.

…¹⁹⁸

The FTA may require security for taxes, interest and costs, even if they are not bindingly assessed or due, if:

1. their payment on time appears to be at risk;

2. the taxable person makes preparations to give up their domicile, registered office or permanent establishment in Switzerland or to be deleted from the Swiss Commercial Register;

3. the taxable person is in arrears with payment;

4. the taxable person takes over all or part of a business over which bankruptcy proceedings have been commenced;

5. the taxable person submits returns that are obviously too low.

The FTA may require a member of the managing body of a legal person to provide security for taxes, interest and costs owed or likely to be owed by that legal person if:

1. the member in question belonged to the managing body of at least two other legal persons in respect of which bankruptcy proceedings have been opened within a short period of time; and

2. there are indications that the member concerned has acted in a criminal manner in connection with these bankruptcies.¹⁹⁹

If the taxable person waives exemption from tax liability (Art. 11) or opts for the taxation of supplies exempt without credit (Art. 22), the FTA may demand from the person security pursuant to paragraph 7.

The ruling requiring security must cite the legal reason for the security, the amount to be secured and the office that accepts the security; it qualifies as a freezing order in terms of Article 274 DEBA²⁰⁰. There is no right of opposition against the ruling requiring security.

An objection may be filed against the ruling in the Federal Administrative Court.

Objections against rulings requiring security do not have suspensive effect.

The service of a ruling concerning the tax claim qualifies as the raising of an action under Article 279 DEBA. The period for instituting debt enforcement procedures begins to run when the ruling concerning the tax claim becomes legally binding.

Security must be provided by cash deposit, solvent guarantees, bank guarantees, mortgage certificates, life insurance policies with surrender value, listed Swiss franc bonds issued by Swiss borrowers or cash bonds issued by Swiss banks.

A purchaser who uses an electronic procedure to purchase goods for tourist export may be requested to provide security in the amount of the corresponding tax at the time of purchase.

The security shall be refunded if proof of export is furnished within the prescribed period.

A surplus in favour of the taxable person resulting from the tax return or from the difference between the instalments paid and the tax claim may:²⁰²

1. be set off against debts from prior periods;

2. be credited for set-off against anticipated amounts payable for subsequent periods if the taxable person is in arrears with the payment of tax or for other reasons it appears probable that the tax claim is at risk; the amount credited carries interest from the 61^st day after receipt by the FTA of the tax return until the date of the set-off at the rate that applies to refund interest; or

3. be set off against security required by the FTA.

In the case of taxable persons without a domicile, registered office or permanent establishment in Switzerland, the FTA may also require security for anticipated debts under Article 93 paragraph 7.

If payments are repeatedly in arrears, the FTA may require the taxable person to make monthly or half-monthly advance payments.

A legal entity or a permanent establishment of a foreign business may not be deleted from the Swiss Commercial Register until the FTA has notified the administration competent for keeping the register that the tax due has been paid or security has been provided.

The Federal Council:

1. regulates the relief from VAT for beneficiaries under Article 2 of the Host State Act of 22 June 2007²¹⁴ who are exempt from liability for tax;

2. determines the requirements that customers who have their domicile, registered office or permanent establishment abroad must satisfy in order to be eligible for a refund of tax levied on Swiss territory on supplies made to them or on their imports that are covered by reciprocal law of the land in which they have their domicile, registered office or permanent establishment; in principle the same requirements apply as exist for domestic taxable persons in respect of the input tax deduction;

3. ²¹⁵regulates the VAT treatment of supplies to persons who are employees and at the same time closely related persons; in doing so, it shall take account of the treatment of such supplies in the case of direct federal taxation and may specify exceptions to Article 24 paragraph 2.

…²¹⁶

The Federal Council issues the implementing regulations.

The FDF:

1. defines market conform interest rates for interest on late payment and refunds and updates them periodically;

2. determines the cases in which interest on late payment is not imposed;

3. stipulates up to what amount negligible amounts of interest on late payment and refunds will not be imposed or are not payable;

4. ²¹⁷determines what is deemed to be the amount that is so negligible that it need not be invoiced as provisional tax.

The Federal Council may appoint a consultative committee comprising representatives of taxable persons, the cantons, academia, tax specialists, and consumers.²¹⁸

The consultative committee advises on amendments to this Act and to the implementing provisions and practice rules based on it in relation to their effects on taxable persons and the economy.

It comments on drafts and may issue recommendations for amendments of its own accord.

The VAT Act of 2 September 1999²¹⁹ is repealed.

The following federal acts are amended as follows:

…²²⁰

The previous statutory provisions and the regulations issued on the basis thereof remain, subject to Article 113, applicable to all matters that occurred and legal circumstances that arose while they were valid. Prescription continues to be governed by Articles 49 and 50 of the previous law.

Supplies made before this Act came into force and imports of goods for which the import tax debt arose before this Act came into force are governed by the former law.

Supplies made in part before this Act came into force must be taxed under former law for this part. Supplies made in part after this Act comes into force are taxable under the new law for this part.

In order to determine whether the exemption from tax liability under Article 10 paragraph 2 exists when this Act comes into force, the new law shall be applied to the supplies taxable under this Act generated in the twelve months prior to it coming into force.

The provisions on retrospective input tax deduction under Article 32 also apply to supplies that did not entitle the taxable person to make an input tax deduction before this Act came into force.

Subject to Article 91, the new procedural law applies to all procedures pending on the date that this Act comes into force.

Taxable persons may, when this Act comes into force, again make use of the election options provided for in this Act. If the election options are linked to specific deadlines, they begin to run again on the date that this Act comes into force.

If the taxable person does not respond to the election options within 90 days of this Act coming into force, it is assumed that the person is abiding by their election, provided this continues to be legally possible.

If the tax rates change, Articles 112 and 113 apply by analogy. The Federal Council shall update the maximum amounts laid down in Article 37 paragraph 1 as appropriate.²²¹

Taxable persons must be allowed sufficiently long periods for the reporting of the tax amounts at the previous rates that are geared to the nature of the supply and service agreements.

The input tax deduction may not be retrospectively cancelled on collectors’ items such as works of art, antiques and suchlike in respect of which input tax was already deducted before the Amendment of 30 September 2016 comes into force, provided the sale is made on Swiss territory and VAT is paid on the entire selling price.

Taxable persons who wish to file an annual return in accordance with Article 35a in the year in which the Amendment of 16 June 2023 comes into force must apply to the FTA for this within 60 days of this Amendment coming into force.

If goods are supplied from abroad to Switzerland that are exempt from import tax in accordance with Article 53 paragraph 1 letter a on account of the negligible amount of tax, the tax liability of the supplier shall commence when this amendment comes into force if:

1. the supplier is deemed to be a supplier in accordance with Article 20a;

2. the suppler has achieved a turnover of at least 100,000 Swiss francs in the preceding twelve months by supplying such goods; and

3. it is reasonable to assume that the supplier will continue to make such supplies of goods during the twelve months following this Amendment coming into force.

This Act is subject to an optional referendum.²²⁴

Subject to paragraph 3, it shall come into force on 1 January 2010. The Federal Council shall stipulate the commencement date for Article 34 paragraph 3 and 78 paragraph 4.²²⁵

If a referendum is requested and if the Act is approved by popular vote, the Federal Council shall determine the commencement date.