641.20

Federal Act on Value Added Tax (VAT Act)

(Value Added Tax Act, VAT Act)

Preamble

The Federal Assembly of the Swiss Confederation,

based on Article 130 of the Federal Constitution¹,
and having considered the Dispatch of the Federal Council dated 25 June 2008²,

decrees:

Title 1 General Provisions

Art. 1 Subject and principles

The Confederation shall levy a general consumption tax based on the system of net all-phase taxation with input tax deduction (Value Added Tax). The purpose of the tax is to tax non-business end use on Swiss territory.

As Value Added Tax, it levies:a. a tax on goods and services supplied for consideration by taxable persons on Swiss territory (domestic tax);b.³ a tax on the acquisition of supplies made on Swiss territory from businesses domiciled abroad and on the purchase of emission allowances and similar rights (acquisition tax);c. a tax on the import of goods (import tax).

The tax is levied on the following principles:a. competitive neutrality;b. efficiency of payment and imposition;c. transferability.

Art. 2 Relationship to cantonal law

Ticket taxes and taxes on the transfer of title that are imposed by the cantons and communes do not qualify as taxes of the same nature as those defined in Article 134 of the Federal Constitution.

They may be imposed to the extent they do not include Value Added Tax in their assessment basis.

Art. 3 Definitions

In this Act:a. Swiss territory means the territory of the Swiss Confederation together with the customs enclaves according to Article 3 paragraph 2 of the Customs Act of 18 March 2005⁴ (CustA).b. Goods means movable and immovable objects and electricity, gas, heating, refrigeration and the like.c. Supply means the concession of a usable economic asset to a third party in expectation of a consideration, even if it is required by law or based on an official order.d. Supply of goods means:1. the transfer of the power to dispose of a good commercially in one’s own name;2. the delivery of a good on which work has been performed, even if the good is not altered by the work, but only tested, calibrated, regulated, checked for its function or has been treated in another way;3. making a good available for use or exploitation.e. Supply of services means every supply that is not a supply of goods; a supply of services is also made if:1. intangible assets and rights are made available;2. an action is omitted or an action or a situation is tolerated.f. Consideration means an asset which the recipient or, in place of the recipient, a third party expends in return for receipt of a supply.g.⁵Sovereign activity means an activity of a public authority or of a person or organisation acting for a public authority without business character, in particular where it is not marketable and not in competition with activities of private suppliers, even if fees, contributions or other charges are levied for it.h.⁶Closely related persons means:1. the owners of at least 20 per cent of the nominal or basic capital of a business or of an equivalent participation in a partnership, or persons associated with them;2. foundations and associations with which there is a particularly close economic, contractual or personal relationship; pension schemes are not regarded as closely related persons.i.⁷donation means a voluntary contribution with the intention of enriching the recipient without expectation of a consideration in the VAT sense; a contribution also qualifies as a donation if:1. the contribution is mentioned on one or more occasions in a publication in neutral form, even if the name or the logo of the donor is used;2. it is a contribution by passive members and by patrons to associations or to charitable organisations; contributions by patrons to charitable organisations are also deemed to be donations if the charitable organisation voluntarily grants its patrons advantages in terms of its articles provided it informs the patron that they have no right to be granted the advantages.j. Charitable organisation means an organisation which fulfils the requirements that apply for Direct Federal Tax pursuant to Article 56 letter g DFTA.k. Invoice means any document by which the consideration for a supply is settled with a third party, irrespective of how the document is titled in business transactions.l.⁸Digital platform means an electronic interface that facilitates interaction between two or more users online with the aim of providing a supply of goods or of services.

Art. 4 Samnaun and Sampuoir

As long as the valley areas of Samnaun and Sampuoir remain outside Swiss customs territory, this Act applies in both valley areas only to services.⁹

The loss of tax revenue suffered by the Confederation as a result of paragraph 1 must be compensated for by the communes of Samnaun and Valsot.¹⁰

The Federal Council regulates the details in consultation with the communes of Samnaun and Valsot. In doing so it shall take appropriate account of the savings resulting from the lower cost of levying the tax.¹¹

Art. 5¹² Indexation

The Federal Council shall decide on the adjustment of the Swiss franc amounts mentioned in Articles 31 paragraph 2 letter c, 35 paragraph 1^bis letter b, 37 paragraph 1, 38 paragraph 1 and 45 paragraph 2 letter b, as soon as the Swiss consumer price index has increased by more than 30 per cent since the most recent adjustment.

Art. 6 Passing on of the tax

The passing on of the tax is based on agreements governed by private law.

The civil courts are competent to judge disputes about the passing on of the tax.

Art. 7 Place of supply of goods

The place of supply of goods is the place where:a. the good is located at the time of transfer of the power to dispose commercially of it, of its delivery or of its being made available for use or exploitation;b. the transport or dispatch of the good to the customer or to a third party on the customer’s instructions begins.

The place of supply of electricity by cable, gas via the natural gas distribution network or district heating is deemed to be the place at which the recipients of the supply have their registered office or a permanent establishment for which the supply is made, or, in the absence of such a registered office or such a permanent establishment, the place where the electricity, gas or district heating is actually used or consumed.¹³

In the case of the supply of a good from abroad to Swiss territory, the place of supply is deemed to be on Swiss territory, provided the supplier:a. has authorisation from the Federal Tax Administration (FTA) to import the good in its own name (declaration of subordination), and does not waive authorisation at the time of import; orb. makes supplies of goods under paragraph 1 letter b of the preceding article that are exempt from import tax under Article 53 paragraph 1 letter a because of the insignificant tax amount, and makes a minimum turnover of 100 000 francs per year therefrom.¹⁴

Art. 8 Place of supply of a service

The place of supply of a service is deemed, subject to paragraph 2, to be the place at which the recipient of the service has its registered office or a permanent establishment for which the service is provided, or in the absence of such a registered office or such a permanent establishment, the recipient’s domicile or place of normal abode.

The place of supply of the following services is deemed to be:a. for services that are typically supplied directly in the physical presence of individuals, even if exceptionally they are supplied at a distance: the place where the person supplying the service has its registered office or a permanent establishment, or in the absence of such a registered office or such a permanent establishment the domicile or the place from which the person works; such services are in particular: healing treatments, therapies, nursing, personal hygiene, marriage, family and life counselling, social services and social welfare services and child and youth care;b.¹⁵ for travel services and related travel agency services retailed by travel agencies: the place where the person operating the travel agency has its registered office or a permanent establishment, or in the absence of such a registered office or such a permanent establishment the domicile or the place from which the person works;c.¹⁶ for services in the area of culture, the arts, sport, the science, scholarship, entertainment or similar services that are provided directly to persons physically present at the location, including services of the event organiser and related services, if applicable: the place where these activities are actually performed;d. for restaurant supplies: the place where the supply is actually made;e. for passenger transport services: the place where transport actually takes place, as measured by the distance travelled; in the case of cross-border transport, the Federal Council may order that short internal distances may count as foreign and short distances abroad as internal distances;f. for services in connection with immovable property: the place where the property is situated; such services are in particular: brokerage, management, survey and valuation of the property, services in connection with the purchase or creation of rights in rem, services in connection with the preparation or the coordination of construction services, such as architectural, engineering and construction supervision services, surveillance of properties and buildings and accommodation services;g. for services in the area of international development cooperation and humanitarian help: the place for which the service is destined.

Art. 9 Avoidance of distortion of competition

In order to avoid a distortion of competition due to the double taxation or non-taxation of cross-border supplies, the Federal Council may, in divergence from Article 3, regulate the definition of supplies of goods and services and, in divergence from Articles 7 and 8, determine the place of supply.

Title 2 Domestic Tax

Chapter 1 Taxable Person

Art. 10 Principle

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:a. makes supplies on Swiss territory through that business; or b. has their registered office, domicile or permanent establishment on Swiss territory.¹⁷

A person carries on a business if they:a. 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; andb. 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:a. 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;b. 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:²⁰1. supplies exempt from the tax,1^bis.²¹ supplies 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;c.²² as 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;d.²³ operates 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.

Art. 11 Waiver of exemption from tax liability

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.

Art. 12 Public authorities

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.

Art. 13 Group taxation

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.

Art. 14 Commencement and termination of tax liability and of exemptionfrom tax liability

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:a. 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;b. 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.

Art. 15 Joint liability

Jointly and severally liable with the taxable person are:a. partners in a simple partnership, a general or limited partnership within the scope of their civil law liability;b. persons who voluntarily conduct or arrange an auction;c.³⁰ any 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;d. 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;e. 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;f. 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;g.³¹ in 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.

Art. 16 Succession to tax liability

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.

Art. 17 Tax substitution

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

Chapter 2 Object of Taxation

Art. 18 Principle

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:a. 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;b. funds that tourist offices receive exclusively from public law tourist charges and which they employ on behalf of public authorities for the public good;c. contributions from cantonal water, sewage or waste funds to waste disposal institutions or waterworks;d. donations;e. contributions to businesses, in particular interest free loans, recapitalisation payments and written-off debts;f. dividends and other profit shares;g. 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;h. deposits in particular on packaging and containers;i. payments of damages, satisfaction and the like;j. remuneration for employment, such as board members' and trustees’ fees, remuneration of authorities or pay;k. reimbursements, contributions to and allowances for supplies of goods delivered abroad that are exempt from the tax under Article 23 paragraph 2 number 1;l. 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

Art. 19 Plurality of supplies

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.

Art. 20 Attribution of supplies

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

Art. 20a³⁶ Attribution of supplies in the case of supplies of goods via electronic platforms

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:a. They are neither directly nor indirectly involved in the ordering process.b. They do not generate turnover directly related to the business.c. They only carry out the payment processing in connection with the supply.d. They only provide space for advertisements.e. They only provide advertising services.f. They only redirect or forward purchasers to other electronic platforms.

Art. 21 Supplies exempt from the tax without credit

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:1.³⁷ the transport of letters that is included in the reserved services under Article 18 of the Postal Services Act of 17 December 2010³⁸;2.³⁹ hospital 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^bis.⁴⁰ coordinated 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;8.⁴¹ supplies 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:⁴²a.⁴³ supplies 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,b. 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,c. examinations carried out in the area of education,d. 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,e. 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;12.⁴⁴ the 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:⁴⁵a. theatrical, musical and choreographic performances and film shows,b.⁴⁶ performances 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,c. visits to museums, galleries, monuments, historical sites and botanical and zoological gardens,d. 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^bis.⁴⁷ considerations demanded for participation in cultural events (e.g. registration fees), together with the ancillary services included;15.⁴⁸ considerations demanded for sporting events, including considerations for participation in such events (e.g. starting money), together with the ancillary services included;16.⁴⁹ cultural 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;17.⁵¹ supplies 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;18.⁵² in the insurance industry: a. insurance and reinsurance supplies,b. social insurance supplies,c. 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,d. 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:a. the granting and brokerage of credits and the management of credits by the lenders,b. the brokerage and assumption of liabilities, sureties and other securities and guarantees and the management of collateral by the lenders,c. 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,d. 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,e. 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,f.⁵³ offering 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,g.⁵⁶ the 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:a. the renting of residential and sleeping accommodation for guests and the renting of halls and rooms in hotels and restaurants,b. the renting of camping sites,c. 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,d. the renting and leasing of immovable equipment and machines belonging to an operating facility, but not to a sports facility,e. the renting of safe deposit boxes,f. 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;23.⁵⁸ turnovers 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;28.⁶¹ supplies:a. between organisational units within the same public authority, b. between private or public law companies owned wholly by public authorities and the public authorities that own them or their organisational units,c.⁶² between institutions or foundations that have been established or are run exclusively by public authorities and these public authorities and their organisational units;28^bis.⁶³ the provision of staff by public authorities to other public authorities;29. the exercise of arbitration functions;30.⁶⁴ supplies 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;31.⁶⁵ travel 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

Art. 22 Option for the taxation of supplies exempt from the tax without credit

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:a. supplies under Article 21 paragraph 2 numbers 18, 19 and 23;b.⁶⁹ supplies 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.

Art. 23 Supplies exempt from the tax

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;2.⁷⁰ the 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;3.⁷¹ the 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^bis.⁷³ the 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;7.⁷⁴ transport services and ancillary logistic activities, such as loading, unloading, trans-shipment, clearing or temporary warehousing:a. 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 b. 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;11.⁷⁵ the supply of goods under Article 17 paragraph 1^bis CustA to persons departing abroad or arriving from abroad by air.12.⁷⁶ Turnover generated by gold and alloys of gold of the following form:a. government minted gold coins under tariff headings 7118.9010, 9705.3100 and 9705.3900⁷⁷,b. 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,c. gold in the form of granules with a minimum fineness of 995 thousandths, packed and sealed by a recognised assayer-melter,d. 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,e. 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;13.⁷⁸ the 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

Chapter 3 Assessment Basis and Tax Rates

Art. 24 Assessment basis

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:a. ticket taxes, immovable property transfer taxes and the VAT itself payable on the supply;b. 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);c. the portion of the consideration that, on sale of an immovable good, relates to the value of the land;d. 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.

Art. 24a⁸¹ Margin taxation

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.

Art. 25 Tax rates

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:⁸³a. the supply of the following goods:1. tap water,2.⁸⁴ foodstuffs 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,10.⁸⁶ products for menstrual hygiene;a^bis.⁸⁷ electronic 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.

Chapter 4 Invoicing and VAT Details

Art. 26 Invoice

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:a.⁹¹ the 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;b. the name and location of the recipient of the supply in the form in which they use in business transactions;c. the date or period of the provision of the supply, in the event that it differs from the invoice date;d. the nature, object and extent of the supply;e. the consideration for the supply;f. 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.

Art. 27 Incorrect or unauthorised VAT details

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:a. the invoice is corrected in accordance with paragraph 4; orb.⁹² they 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.

Chapter 5 Input Tax Deduction

Art. 28 Principle

The taxable person may in the course of their business activity, subject to Articles 29 and 33, deduct the following input taxes:a. the domestic tax invoiced to them;b. the acquisition tax that they have declared (Art. 45–49);c. 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

Art. 28a⁹⁶ Deduction of notional input tax

The taxable person may deduct notional input tax if:a. they acquire an individualisable moveable good in the course of a business activity entitling them to make an input tax deduction; andb. 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.

Art. 29 Exclusion of the right to input tax deduction

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

Art. 30 Mixed use

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).

Art. 31 Own use

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:a. they use outside their business activity, in particular for private purposes;b. they use for a business activity which does not entitle them to make the input tax deduction under Article 29 paragraph 1;c. 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;d. 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.

Art. 32 Subsequent input tax deduction

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.

Art. 33 Reduction of the input tax deduction

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.

Chapter 6 Calculation, Constitution and Prescription of the Tax Claim

Section 1 Time of Assessment

Art. 34 Tax period

The tax is levied by tax period.

The tax period is the calendar year.

The FTA shall permit the taxable person on request to use the business year as the tax period.¹⁰¹

Art. 35 Reporting period

Within the tax period, the tax shall be reported on a quarterly basis. For reporting using net tax rates (Art. 37 paras. 1 and 2), the tax shall be reported half-yearly.¹⁰²

At the request of the taxable person, the tax shall be reported:a. in the case of a regular input tax surplus: monthly;b. in the case of a turnover not exceeding 5,005,000 francs from taxable supplies each year: annually.¹⁰³

On application, the FTA shall permit, in justifiable cases, other reporting periods and shall stipulate the conditions therefor.

Art. 35a¹⁰⁴ Annual reporting

The FTA may refuse or revoke authorisation for annual reporting in the case of taxable persons who fail to comply or only partially comply with their reporting and payment obligations.

Annual reporting must be used for at least one full tax period.

Any person who changes from annual to monthly, quarterly or half-yearly reporting may change back to annual reporting after three tax periods at the earliest.

Changes must take effect at the beginning of a tax period.

Section 2 Amount of the Tax Claim and Notification Procedure

Art. 36 Effective reporting method

In principle, the effective reporting method must be used.

When applying the effective reporting method, the tax claim is calculated as the difference between the domestic tax payable, the acquisition tax (Art. 45) and import tax declared in the transfer procedure (Art. 63) and the input tax credit for the corresponding reporting period.

Art. 37 Reporting using the net tax rate and the flat tax rate methods

If a taxable person does not generate more than 5,024,000 francs turnover from taxable supplies annually and in the same period does not have to pay more than 108,000 francs in tax, calculated at the net tax rate that applies to them, they may report under the net tax rate method.¹⁰⁵

When using the net tax rate method, the tax claim is determined by multiplying the sum of the taxable considerations, including tax, generated in the reporting period by the net tax rate approved by the FTA.

The net tax rates take into account the input tax amounts usual in the relevant branch of the industry. They are fixed by the FTA after consultation with the industry association concerned.¹⁰⁶

Authorisation to report under the net tax rate method must be requested from the FTA and the method must be used for at least one tax period. If the taxable person elects for the effective reporting method, they may not change to the net tax rate method for at least three years. Changes are possible for the beginning of a tax period.

Public authorities and related institutions, in particular private hospitals and schools or licensed transport undertakings and associations and foundations may report using the flat tax rate method. The Federal Council shall regulate the details.

Art. 38 Notification procedure

If the tax calculated at the statutory rate on the sales price exceeds 10,000 francs or if the sale is made to a closely related person, the taxable person must fulfil their reporting and tax payment obligation by notification in the following cases:a.¹⁰⁷ reorganisations in accordance with Articles 19 or 61 DFTA¹⁰⁸;b.¹⁰⁹ other transfers of all of the assets or part of the assets to another taxable person in the context of an incorporation, liquidation, reorganisation, sale of business or a legal transaction regulated in the Mergers Act of 3 October 2003¹¹⁰.

The Federal Council may determine other cases in which the notification procedure must be, or may be, used.

The notifications must be made in the course of ordinary reporting.

By using the notification procedure, the acquirer accepts the seller’s assessment basis and the level of use entitling to an input tax deduction in respect of the assets transferred.

If in the cases mentioned in paragraph 1 the notification procedure was not applied but security is provided for the tax claim, the notification procedure may no longer be ordered.

Section 3 Constitution, Modification and Prescription of the Tax Claim

Art. 39 Form of reporting

The tax shall be reported based on the agreed consideration.

The FTA shall allow taxable persons on application to report on the basis of the consideration collected.

The form of reporting chosen must be retained for at least one tax period.

The FTA may require taxable persons to report on the basis of the consideration collected if:a. they receive, to a significant extent, considerations before they make the supply or issue an invoice; orb. there is reasonable suspicion that a taxable person is abusing the procedure of reporting based on agreed considerations to obtain an unlawful benefit for themselves or a third party.

Art. 40 Constitution of the tax claim

If reporting is on the basis of agreed considerations, the right to make an input tax deduction is constituted at the time of receipt of the invoice. The turnover tax debt is incurred:a. on invoicing;b. with the issue of a partial invoice or with the collection of the partial payment, if the supplies give rise to a series of partial invoices or partial payments;c. with the collection of the consideration on advance payments for supplies not exempt from the tax and for supplies without invoice.

If reporting is based on collected considerations, the right to make an input tax deduction is constituted at the time of payment. The turnover tax liability is incurred on collection of the consideration.

The right to make an input tax deduction based on the acquisition tax is constituted at the time of reporting the acquisition tax (Art. 48).¹¹¹

The right to make an input tax deduction based on the import tax is constituted at the end of the reporting period in which the tax was established.

Art. 41 Subsequent modification of the turnover tax liability and of the input tax deduction

If the recipient of the supply corrects paid or agreed considerations, the turnover tax liability must be adjusted at the time when the correction is booked or the corrected consideration is collected.

If the consideration expended by the taxable person is corrected, the turnover tax liability must be adjusted at the time when the correction is booked or the corrected consideration is paid.

Art. 42 Prescription of the right to establish the tax

The right to establish a tax claim prescribes five years from the end of the tax period in which the tax claim was established.

This prescriptive period is interrupted by a written declaration requiring confirmation of receipt that is aimed at establishing or correcting the tax claim, a ruling, a decision on opposition, or a judgment. A corresponding interruption of the prescriptive period may also be achieved by the announcement of an audit under Article 78 paragraph 3 or the commencement of an unannounced audit.

If the prescriptive period is interrupted by the FTA or an appeal body, the prescriptive period begins to run again. It then runs for two years.

The prescriptive period shall be suspended for as long as proceedings under this Act relating to tax offences are being conducted in respect of the relevant tax period and the person liable for payment has been notified (Art. 104 para. 4).

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

The right to establish the tax claim in any case prescribes 10 years from the end of the tax period in which the tax claim arose.

Art. 43 Validity of the tax claim

The tax claim is made legally binding by:a. a ruling that has become legally binding, a decision on opposition that has become legally binding or a judgment that has become legally binding;b. the written recognition or payment without reservation of an assessment notice by the taxable person;c. the prescription of the right to establish the tax.

Until they are legally binding, the returns submitted and paid may be corrected.

Art. 44 Assignment and pledge of the tax claim

The taxable person may assign and pledge their tax claim in accordance with the provisions of private law.

The rights of the FTA, namely to object and to take measures to secure the tax, are not affected by the assignment or pledge.¹¹²

Title 3 Acquisition Tax

Art. 45 Liability for acquisition tax

The following are subject to the acquisition tax:a.¹¹³ supplies of services by businesses based abroad that are not entered in the Register of Taxable Persons where the place of supply under Article 8 paragraph 1 is situated on Swiss territory, with the exception of telecommunication or electronic services supplied to non-taxable recipients;b. the import of data storage media without market value with the services and rights included therein (Art. 52 para. 2);c.¹¹⁴ supplies of immovable goods on Swiss territory that are not subject to import tax and which are made by businesses based abroad and which are not entered in the Register of Taxable Persons, with the exception of making such goods available for use or exploitation;d.¹¹⁵ the supply of electricity in cables, gas via the natural gas distribution network and district heating by businesses based abroad to persons liable to tax on Swiss territory;e.¹¹⁶ the transfer of emission allowances, certificates and attestations for emission reductions, certificates of origin for electricity and similar rights, certificates and allowances by businesses with registered office, domicile or a permanent establishment abroad or on Swiss territory, which is not exempt from domestic tax without credit in accordance with Article 21 paragraph 2 number 19 letter e.

The recipient of supplies under paragraph 1 is liable to the tax, provided they:¹¹⁷a. are liable to the tax under Article 10; orb.¹¹⁸ procure such supplies for more than 10,000 francs in the calendar year.

Art. 45a¹¹⁹ Supplies not subject to acquisition tax

Supplies that are exempt from domestic tax without credit under Article 21 or exempt from the domestic tax under Article 23 are not subject to the acquisition tax.

Art. 46 Tax assessment and tax rates

The provisions of Articles 24 and 25 apply to tax assessment and the tax rates.

Art. 47 Tax and reporting period

For taxable persons under Article 45 paragraph 2 letter a, the same tax and reporting periods apply as for the domestic tax (Art. 34 and 35).

The tax and reporting period for taxable persons under Article 45 paragraph 2 letter b is the calendar year.

Art. 48 Constitution and prescription of the right to establish the acquisition tax debt

The acquisition tax debt is incurred:a. with the payment of the consideration for the supply;b. in the case of taxable persons under Article 45 paragraph 2 letter a who report on the basis of agreed considerations (Art. 40 para. 1) at the time of receipt of the invoice, and for supplies without invoicing on payment of the consideration.

Prescription of the right to establish the tax and legally binding effect are governed by Articles 42 and 43.

Art. 49 Joint and several liability, tax succession and substitution

For joint and several liability, tax succession and substitution, the provisions of Articles 15–17 apply.

Title 4 Import Tax

Art. 50 Applicable law

For the tax on the import of goods, the customs legislation applies, unless the following provisions provide otherwise.

Art. 51 Tax liability

Any person who is a customs debtor under Article 70 paragraphs 2 and 3 CustA¹²⁰ is liable to the tax.

Joint and several liability under Article 70 paragraph 3 CustA does not apply to persons who file customs declarations commercially (Art. 109 CustA) if the importer:a. is entitled to make an input tax deduction (Art. 28);b.¹²¹ has the import tax debt charged via the FOCBS’s¹²² centralised settlement procedure (CSP) account; andc. has commissioned the person who files customs declarations commercially to act as their direct agent.

The FOCBS may require the person who issues customs declarations commercially to provide evidence of their authority as an agent.¹²³

Art. 52 Taxable object

The taxable object is:a. the import of goods, including the services and rights contained therein;b. the release of goods under Article 17 paragraph 1^bis CustA¹²⁴ for free circulation by persons arriving by air from abroad.¹²⁵

If, on the import of data storage media, no market value can be established and if the import is not exempt from tax under Article 53, no import tax is due thereon and the provisions concerning the acquisition tax (Art. 45–49) apply.¹²⁶

The provisions of Article 19 apply to a plurality of supplies.

Art. 53 Tax exempt imports

Exempt from the tax is the import of:a. goods in small quantities, of insignificant value or with an insignificant tax amount; the FDF shall issue more detailed provisions;b. human organs by recognised medical institutions and hospitals and of human whole blood by persons possessing the necessary licence;c. works of art that were personally created by painters or sculptors and are brought onto Swiss territory by them or on their behalf, subject to Article 54 paragraph 1 letter c;d. goods that are exempt from customs duties under Article 8 paragraph 2 letters b–d, g and i–l CustA¹²⁷;e. goods under Article 23 paragraph 2 number 8 that are imported as part of a supply of goods by airlines under Article 23 paragraph 2 number 8 or are brought onto Swiss territory by such airlines, provided they have procured the goods prior to import as part of a supply of goods and after the import use them for their own business activities entitling the taxable person to make an input tax deduction (Art. 28);f. goods that have been assessed under the export procedure (Art. 61 CustA) and are returned unaltered to the consignor on Swiss territory, provided they have not been exempt from the tax because of export; if the amount of tax is substantial, the tax exemption with credit is granted by reimbursement; the provisions of Article 59 apply by analogy;g.¹²⁸ electricity in cables, gas via the natural gas distribution network and district heating;h. goods that are declared tax free in treaties governed by international law;i. goods that are imported onto Swiss territory for temporary admission under Articles 9 and 58 CustA or for inward processing under Articles 12 and 59 CustA under the procedure with entitlement to reimbursement, subject to Article 54 paragraph 1 letter d;j. goods that are temporarily imported onto Swiss territory by a person registered on Swiss territory as a taxable person for job processing under a work and labour contract and which are assessed under the procedure for inward processing as being conditionally due for payment (suspensive procedure) (Art. 12 and 59 CustA);k. goods that were exported from Swiss territory under Article 9 and 58 CustA for temporary admission or under Articles 13 and 60 CustA for outward job processing under a work and labour contract and are returned to the consignor on Swiss territory, subject to Article 54 paragraph 1 letter e;l. goods that have been taken abroad for job processing under a work and labour contract under the export procedure (Art. 61 CustA) and are returned to the consignor on Swiss territory, subject to Article 54 paragraph 1 letter f;m.¹²⁹ gold and alloys of gold in accordance with Article 23 paragraph 2 item 12.

The Federal Council may exempt from the import tax goods that it declares exempt from customs duties under Article 8 paragraph 2 letter a CustA.

Art. 54 Assessment basis¹³⁰

The tax is calculated:a. on the consideration, if the goods are imported in fulfilment of a sales or commission transaction;b. on the consideration for supplies of goods under work and labour contracts or for work within the meaning of Article 3 letter d number 2 using goods released for free circulation (Art. 48 CustA¹³¹) and carried out by a person not registered on Swiss territory as a taxable person;c. on the consideration for work carried out abroad on behalf of artists and sculptors on their own works of art (Art. 3 let. d no. 2), provided the works of art were brought onto Swiss territory by them or on their behalf;d. on the consideration for the use of goods that were imported for temporary admission under Articles 9 and 58 CustA, provided the amount of tax due on this consideration is substantial; if no or a reduced consideration is demanded for the temporary use, the consideration that would be charged by an independent third party applies;e. on the consideration for the work carried out abroad on goods (Art. 3 let. d no. 2) that were exported under Articles 9 and 58 CustA for temporary admission or under Articles 13 and 60 CustA for outward job processing under a work and labour contract and are returned to the consignor on Swiss territory;f. on the consideration for the work carried out abroad on goods (Art. 3 let. d no. 2), provided they have been taken abroad for job processing under a work and labour contract under the export procedure (Art. 61 CustA) and are returned to the consignor on Swiss territory;g.¹³² on the market value in the remaining cases; the market value is what the importer, at the level at which the import is effected, would have to pay to obtain the same goods from an independent supplier in the source land of the goods at the time that the import tax debt is incurred under Article 56 under the conditions of free competition.

If the tax calculation is based on the consideration, the consideration paid or payable by the importer or by a third party in their stead under Article 24 applies, subject to Article 18 paragraph 2 letter h. If the consideration is altered subsequently, Article 41 applies by analogy.

The assessment basis must include, if not already included:a. the taxes, customs duties and other charges incurred outside Swiss territory and as a result of the import, with the exception of the Value Added Tax being levied;b. ¹³³ the costs of the transport or dispatch and all related supplies as far as the destination on Swiss territory to which the goods are to be transported at the time import tax debt under Article 56 is incurred; if this location is unknown, the destination is the place where the trans-shipment takes place on Swiss territory after import tax debt is incurred.

If doubt exists as to the correctness of the customs declaration or values are lacking, the FOCBS may estimate the tax assessment basis at its fair discretion.

Price or value information expressed in foreign currency adduced in determining the assessment basis must be converted into Swiss francs at the exchange rate (offer) prevailing on the stock exchange day immediately prior to the incurrence of the import tax debt under Article 56.

Art. 55¹³⁴ Tax rates

The tax on the import of goods is 8.1 per cent, subject to paragraph 2.

The tax is 2.6 per cent on the import of goods under Article 25 paragraph 2 letter a and a^bis.

Art. 56 Incurrence, prescription and payment of the import tax debt

The import tax debt is incurred at the same time as the customs debt (Art. 69 CustA¹³⁵).

Taxable persons under Article 51 who settle the import tax debt via the CSP are allowed a period of 60 days after issue of the invoice to make payment; exceptions are imports made by tourists, which must be reported orally for customs assessment.

In relation to security, facilities may be granted if collection of the tax is not endangered as a result.

The import tax debt prescribes at the same time as the customs debt (Art. 75 CustA). The prescriptive period is suspended for as long as criminal proceedings in respect of tax offences under this Act are in process and the person liable for payment has been informed (Art. 104 para. 4).

If the import tax debt changes as a result of subsequent adjustment of the consideration, in particular as a result of revision of the contract or because of price adjustments between related businesses based on recognised guidelines, the tax that has been assessed too low must be notified to the FOCBS within 30 days of the adjustment. The notification and the adjustment of the tax assessment may be dispensed with if the additional tax payable could be deducted as input tax under Article 28.

Art. 57 Interest on late payment

If the import tax debt is not paid on time, interest on the late payment is due.

The liability for interest on late payment begins:a. where payment is made via the CSP: on expiry of the payment terms granted;b. where the tax is levied on the consideration under Article 54 paragraph 1 letter d: on expiry of the payment terms granted;c. where an improper reimbursement of taxes is reclaimed: on the date of reimbursement;d. in all other cases: on the incurrence of the import tax debt under Article 56.

The liability for interest on late payment also continues during appeal proceedings and instalment payments.

Art. 58 Exceptions to liability for interest on late payment

Interest on late payment is not imposed if:a. the import tax debt has been secured by a cash deposit;b. goods released for free circulation (Art. 48 CustA¹³⁶) are first provisionally assessed (Art. 39 CustA) and at the time of acceptance of the customs declaration, the importer was registered on Swiss territory as a taxable person;c.¹³⁷ goods conditionally assessed (Art. 49, 51 para. 2 letter b, 58 and 59 CustA) on conclusion of the customs procedure:1. are re-exported, or2. are placed under another customs procedure (Art. 47 CustA);c^bis.¹³⁸ in the case of goods conditionally assessed, the importer was registered on Swiss territory as a taxable person at the time of acceptance of the customs declaration;d. ¹³⁹ …e. the goods must be declared periodically for the customs assessment procedure (Art. 42 para. 1 letter c CustA) or are subsequently assessed under a simplified customs assessment procedure (Art. 42 para. 2 CustA) and the importer was registered on Swiss territory as a taxable person at the time of the import.

Art. 59 Right to refund of the tax and prescription

Where excess taxes have been imposed or taxes are not due, there is a right to a refund.

Not refunded are excess taxes imposed, taxes not due and taxes no longer due as a result of a subsequent assessment of the goods under Articles 34 and 51 paragraph 3 CustA¹⁴⁰ or because of their re-export under Articles 49 paragraph 4, 51 paragraph 3, 58 paragraph 3 and 59 paragraph 4 CustA if the importer is registered on Swiss territory as a taxable person and may deduct the tax payable or paid to the FOCBS as input tax under Article 28.

The right prescribes five years from the end of the calendar year in which it was constituted.

The prescriptive period is interrupted if the right is enforced against the FOCBS.

It is suspended for as long as appeal proceedings in respect of the enforcement of the right are pending.

The right to a refund of excess taxes imposed or taxes not due in any event prescribes 15 years from the end of the calendar year in which it was constituted.

Art. 60 Refund because of re-export

The tax imposed on import shall be refunded on application if the conditions for an input tax deduction under Article 28 are not met and:a. the goods are re-exported unaltered without prior handover to a third party as part of a supply of goods on Swiss territory and without having been used earlier; orb. the goods were used on Swiss territory, but are re-exported as a result of cancellation of the supply of goods; in this case the refund is reduced by the amount that represents the tax on the consideration for use of the goods or on the loss of value caused by use of the goods and on the non-refunded import customs duties and duties based on non-customs-based federal laws.

The tax is refunded only if:a. the re-export takes place within five years of the end of the calendar year in which the tax was imposed; andb. the goods exported are proven to be identical to those imported earlier.

The refund may in a specific case be made dependent on proper declaration in the import state.

Applications for a refund must be submitted on declaration for the export procedure. Subsequent refund applications may be considered if they are submitted in writing to the FOCBS within 60 days of issue of the export document with which the goods were assessed under the export procedure (Art. 61 CustA¹⁴¹).

Art. 61 Refund interest

Refund interest shall be paid in respect of the period that elapses before the refund is paid:a. in the case of refunds of excess tax or tax not due under Article 59: from the 61^st day after receipt of the written claim by the FOCBS;b. in respect of refunds of the tax as a result of re-export under Article 60: from the 61^st day after receipt of the application by the FOCBS;c. in respect of procedures with conditional payment liability (Art. 49, 51, 58 and 59 CustA¹⁴²): from the 61^st day after due conclusion of the procedure.

The interest-free period of 60 days does not begin to run until:a. all documents necessary to establish the facts and evaluate the request have been received by the FOCBS;b. the objection to the assessment decision satisfies the requirements of Article 52 of the Federal Act of 20 December 1968¹⁴³ on Administrative Procedure (APA);c. the bases for calculating the tax on the consideration under Article 54 paragraph 1 letter d are known to the FOCBS.

Refund interest is not paid on a tax remission under Article 64.

Art. 62 Competence and procedure

The import tax is levied by the FOCBS. It issues the necessary orders and rulings.

The executive bodies of the FOCBS are authorised to undertake all the investigations that are necessary to examine the facts significant to the assessment of the tax. Articles 68–70, 73–75 and 79 apply by analogy. The FOCBS may, by agreement with the FTA, transfer investigations relating to persons registered on Swiss territory as taxable persons to the FTA.

Art. 63 Transfer of the tax payment

The following taxable persons may declare the tax payable on the import of goods in their periodic tax return to the FTA instead of paying it to the FOCBS (transfer procedure):a. taxable importers registered with the FTA that report using the effective method, provided they regularly import and export goods and this regularly results in significant input tax surpluses;b. suppliers in accordance with Article 20a who are registered as taxable persons, provided that no administrative measure in accordance with Article 79a has been ordered against them.¹⁴⁴

If the goods imported under the transfer procedure are further processed or finished on Swiss territory after the import, the FTA may authorise taxable persons to supply the processed or finished goods to other taxable persons without calculating the tax.

The Federal Council stipulates the details of the transfer procedure.

Art. 64 Tax remission

A remission may be granted for all or part of the import tax, if:a. goods held in the custody of the FOCBS or made subject to a transit procedure (Art. 49 CustA¹⁴⁵), a customs warehousing procedure (Art. 50–57 CustA), a temporary admission procedure (Art. 58 CustA) or a procedure of inward processing (Art. 59 CustA) are destroyed in whole or in part by chance, act of God or with official approval;b. goods released for free circulation by official decree are destroyed in whole or in part or are again exported from Swiss territory;c. a subsequent claim in terms of Article 85 CustA would, in view of special circumstances, constitute an unreasonable burden on the taxable person under Article 51;d. the person responsible for the customs declaration (e.g. the forwarding agent) cannot recover the tax from the importer because of the latter's insolvency, and the importer was at the time of the acceptance of the customs declaration registered as a taxable person on Swiss territory; insolvency of the importer must be assumed if repayment of the debt due to the person responsible for the customs declaration appears to be seriously at risk.

The Directorate General of Customs decides on the tax remission on written application supported by the necessary evidence.

The period for submission of an application is:a. on assessment with unconditional import tax debt: one year after the issue of the import document with which the import tax was assessed;b. on assessment with conditional import tax debt: one year after conclusion of the customs procedure chosen.

Title 5 Procedural Law for Domestic and Acquisition Tax

Chapter 1 General Procedural Provisions

Art. 65 Principles¹⁴⁶

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.

Art. 65a¹⁴⁷ Electronic procedures

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.

Chapter 2 Rights and Obligations of the Taxable Person

Art. 66 Registration and de-registration as a taxable person

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.

Art. 67 Tax representation

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.

Art. 68 Obligation to provide information

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.

Art. 69 Right to receive information

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.

Art. 70 Accounting and retention of records

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.

Art. 71 Filing of the return

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.

Art. 72 Correction of errors in the return

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.

Chapter 3 Obligation of Third Parties to provide Information

Art. 73

Third parties obliged to provide information under paragraph 2 must at the request of the FTA and free of charge:a. provide all information that is necessary to establish tax liability or to calculate the tax claim against a taxable person;b. 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:a. could be a taxable person;b. is liable for the tax in addition to or instead of the taxable person;c. has received or supplied goods or services;d. holds a qualifying interest in a company subject to group taxation;e.¹⁵⁴ brings together suppliers and supply recipients with the aid of a digital platform.

Professional confidentiality as protected by law is reserved.

Chapter 4 Rights and Obligations of the Authorities

Section 1 Confidentiality and Administrative Assistance¹⁵⁵

Art. 74 Confidentiality

Persons entrusted with or consulted on the execution of this Act must maintain confidentiality about the information of which they have become aware in the performance of their duties towards other authorities and private persons and must not grant unauthorised persons access to official documents.

There is no duty of confidentiality:a. when providing administrative assistance under Article 75 and in fulfilling an obligation to report criminal acts;b. towards executive bodies of the judiciary or administration if the authority entrusted with the implementation of this Act has been authorised by the Federal Department of Finance to provide information;c. in a particular case towards the debt enforcement and bankruptcy authorities or in the reporting of debt enforcement or bankruptcy offences to the disadvantage of the FTA;d.¹⁵⁶ for the following information on taxable persons listed in the Register of Taxable Persons: registration number, address, business activity and beginning and end of tax liability;e.¹⁵⁷ in the case of measures in accordance with Article 79a.

Art. 75 Administrative assistance

The tax authorities of the Confederation, cantons, districts, administrative areas and communes shall support each other mutually in fulfilling their tasks; they must prepare the appropriate reports, provide the information required and permit the inspection of files free of charge.

The administrative authorities of the Confederation and the autonomous federal organisations and establishments and all other authorities of the cantons, districts, administrative areas and communes not mentioned in paragraph 1 are obliged to provide information to the FTA if the information requested may be of significance for the enforcement of this Act and for the collection of the tax under this Act or for collecting the business fee under the Federal Act of 24 March 2006¹⁵⁸ on Radio and Television; the information must be provided free of charge. On request, documents must be forwarded to the FTA free of charge.¹⁵⁹

Information may be refused only if its provision conflicts with essential public interests or the information would significantly hinder the authority contacted in the performance of its task. Postal and telecommunications confidentiality must be observed.

Disputes relating to the obligation of administrative authorities of the Confederation to provide information are decided by the Federal Council. Disputes relating to the obligation of authorities of the cantons, districts, administrative areas and communes to provide information are decided by the Federal Supreme Court (Art. 120 of the Federal Supreme Court Act of 17 June 2005¹⁶⁰) if the cantonal government has refused the request for information.

The organisations entrusted with public law tasks have, in the context of these tasks, the same obligation to provide information as the authorities; paragraph 4 applies by analogy.

Art. 75a¹⁶¹ International administrative assistance

Within the scope of its remit, the FTA may, on their request, provide administrative assistance to foreign authorities in performing their tasks, specifically in ensuring correct application of VAT law and in preventing, exposing and prosecuting breaches of VAT law, insofar as this is provided for in an international agreement.

It provides administrative assistance by analogous application of Article 115a to 115i CustA¹⁶².

Section 2 Data Protection¹⁶³

Art. 76¹⁶⁴ Processing of data

In order to fulfil its statutory duties, the FTA is permitted to process sensitive personal data, including data on administrative and criminal proceedings and sanctions.¹⁶⁵

…¹⁶⁶

In order to fulfil its duties, the FTA is also authorised to carry out profiling, including high-risk profiling as defined in the Data Protection Act of 25 September 2020¹⁶⁷:a. for review and audit purposes;b. to establish tax liability;c. to levy the tax;d. to prevent and prosecute breaches of VAT law;e. to produce analyses and risk profiles;f. to produce statistics.¹⁶⁸

Art. 76a¹⁶⁹ Information system

The FTA shall operate an information system for processing personal data, including sensitive personal data on administrative and criminal proceedings and sanctions.¹⁷⁰

The system serves the following purposes:a. establishing the tax liability of individuals, legal entities and partnerships; b. establishing taxable supplies as well as levying and reviewing the tax due thereon and the deductible input tax; c. reviewing the supplies claimed as exempt from tax without credit and the related input tax; d. reviewing the tax exemption with credit of supplies that are by law subject to the tax or which have been voluntarily submitted to the tax (option for taxation); e. carrying out the checks on import and export receipts relevant to the levying of value added tax;f. ensuring the collection of the taxes due from taxable persons and persons jointly liable;g. imposing and enforcing administrative or criminal sanctions; h. processing requests for administrative or mutual legal assistance;i. combating tax crime; j. keeping the statistics required for the collection of the tax; k. producing analyses and risk profiles.

The information system may contain the following personal data, including sensitive personal data:a. data on the identity of persons;b. data on economic activities;c. data on income and financial circumstances;d. data on tax matters;e. data on contractual obligations and assignments of claims;f. data on debt enforcement, bankruptcy and attachment proceedings;g.¹⁷¹ …h. data on the compliance with tax obligations;i. data on suspicion of offences;j. data on offences, seized goods and evidence;k. data on administrative and criminal proceedings and on administrative and mutual legal assistance proceedings.

The Federal Data Protection and Information Commissioner shall have access to the FTA information system for the purposes of its supervisory duties.¹⁷²

Art. 76b¹⁷³ Disclosure of personal data

In order to fulfil its statutory duties under Article 10 of the Federal Audit Office Act of 28 June 1967¹⁷⁴, the Swiss Federal Audit Office shall have access to the FTA information system.

The FTA may disclose personal data from profiling, including data from high-risk profiling in terms of Article 76 paragraph 3 and data in terms of Article 76a paragraph 3, or make such data accessible online to the persons in the FOCBS entrusted with the imposition and collection of VAT or with the conduct of criminal and administrative proceedings, provided this is necessary for them to fulfil their duties.¹⁷⁵

Art. 76c¹⁷⁶ Safeguarding data and documents

Data and documents that are used and processed in the application of this Act must be carefully and systematically held in safekeeping and protected against any damage.

The documents stored on the basis of this provision are equivalent to the originals.

Art. 76d¹⁷⁷ Implementing provisions

The Federal Council shall issue implementing provisions on:a. the information system; b. the categories of personal data processed;c. the catalogue of sensitive personal data on administrative and criminal proceedings and sanctions;d. rights to access and process data; e. the retention period for the data; andf. the archiving and destruction of the data.

Section 3 Securing the Correct Tax Payment¹⁷⁸

Art. 77 Review

The FTA shall review the fulfilment of the obligation to register as a taxable person and the tax returns and payments.

Art. 78 Audit

The FTA may perform audits of taxable persons to the extent this is necessary to clarify the circumstances. For this purpose, these persons must grant the FTA access to their accounts and related receipts. The same applies to third parties obliged to provide information under Article 73 paragraph 2.

The demand for and review of comprehensive documentation by the FTA is also regarded as an audit.

Written notice must be given of an audit. In justifiable and exceptional cases, notification of an audit may be waived.

The taxable person may make a justified request for an audit to be carried out. The audit must be performed within two years.

The audit must be concluded within 360 days of notification with an assessment notice; it states the amount of the tax claim in the period audited.

Findings that concern third parties and that are made during an audit in accordance with paragraphs 1–4 at any of the following institutions may only be used for the purposes of collecting value added tax: a. the Swiss National Bank;b. a central mortgage bond institution;c. a bank or savings bank as defined in the Banking Act of 8 November 1934¹⁷⁹;d. a financial institution as defined in the Financial Institutions Act of 15 June 2018¹⁸⁰;e. a financial market infrastructure as defined in the Financial Market Infrastructure Act of 19 June 2015¹⁸¹.¹⁸²

Professional secrecy in accordance with the Banking Act, the Financial Institutions Act and the Financial Market Infrastructure Act must be preserved.¹⁸³

Art. 79 Assessment according to best judgement

If no records or only incomplete records are available or if the results reported obviously do not reflect the true circumstances, the FTA shall make an assessment according to its best judgement of the tax claim.

The tax claim is established with an assessment notice.

Art. 79a¹⁸⁴ Administrative measures

The FTA may order administrative measures against a taxable person who makes supplies on Swiss territory in accordance with Article 7 paragraph 3 letter b if that person:a. fails to register as a taxable person; orb. fails to comply or only partially complies with their reporting or payment obligations.

The FTA shall hear the taxable person before deciding on the administrative measures. The supply recipients shall not be heard.

The FTA may order a ban on the import of goods that are exempt from import tax under Article 53 paragraph 1 letter a because of the negligible amount of tax. If the taxable person continues to fail to comply with their obligations despite the import ban, the FTA may order the destruction of the goods without compensation.

The measures shall be enforced by the FOCBS.

The FTA shall publish the names of taxable persons against whom measures in accordance with paragraph 3 have been ordered in a legally binding ruling.

Art. 80 Simplifications

If the exact establishment of individual facts important to the assessment of the tax would cause excessive inconvenience to the taxable person, the FTA shall grant facilities and allow the tax to be determined approximately, provided that as a result there is no significant loss of or increase in the tax, no material distortion of the competitive situation and no excessive complication of the tax return for other taxable persons and the tax audit.

Chapter 5 Ruling and Appeal Procedures

Art. 81 Principles

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.

Art. 82 FTA rulings

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:a. the existence or scale of the tax liability is disputed;b. the registration or de-registration in the Register of Taxable Persons is disputed;c. the existence or amount of the tax claim, of joint liability or of the entitlement to a refund of taxes is disputed;d. the taxable person or persons jointly liable fail to pay the tax;e. other obligations arising under this Act or from ordinances based on it are not recognised or not fulfilled;f. 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.

Art. 83 Opposition

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.

Art. 84 Costs and compensation

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.

Art. 85 Review, explanation and correction

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

Chapter 6 Collection

Art. 86 Payment of the tax

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

Art. 86a¹⁹⁰ Provisional tax collection in the case of annual reporting

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:a. 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;b. 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.

Art. 87 Interest on late payment

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.

Art. 88 Refunds to the taxable person

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:a. the set-off of this surplus against import tax liabilities, even if they are not yet due;b. the use of the surplus as security for tax under Article 94 paragraph 1;c. 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.

Art. 89 Debt enforcement

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.

Art. 90 Payment facilities

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.

Art. 91 Prescription of the right to collect tax

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.

Art. 92 Tax remission

The FTA may abate bindingly assessed taxes in whole or in part if the taxable person:a. 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;b. 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; orc. 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

Chapter 7 Security for the Tax

Art. 93 Security

The FTA may require security for taxes, interest and costs, even if they are not bindingly assessed or due, if:a. their payment on time appears to be at risk;b. 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;c. the taxable person is in arrears with payment;d. the taxable person takes over all or part of a business over which bankruptcy proceedings have been commenced;e. 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:a. 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; andb. 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.

Art. 93a²⁰¹ Security for tourist exports

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.

Art. 94 Other collateral measures

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:²⁰²a. be set off against debts from prior periods;b. 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; orc. 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.

Art. 95 Deletion from the Commercial Register

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.

Title 6 Criminal Provisions

Art. 96 Tax evasion

Any person who wilfully or negligently reduces the tax claim to the detriment of the state:a. by not declaring in a tax period all receipts, declaring receipts from supplies exempt from the tax that are too high, not declaring all supplies subject to acquisition tax or by declaring expenses entitling to an input tax deduction that are too high;b. by obtaining an incorrect refund; orc. by obtaining an unjustified tax abatement;shall be liable to a fine not exceeding 400,000 francs.

The fine shall not exceed 800,000 francs if the tax evaded in the cases mentioned in paragraph 1 is transferred in a form that entitles the taxable person to make an input tax deduction.

Any person who reduces the tax due to the state by declaring the tax factors relevant for establishment of the tax truthfully, but qualifying them incorrectly for tax purposes, in that they wilfully fail to properly apply clear legal provisions, instructions from the authorities or published practice rules and does not inform the authorities thereof in writing in advance shall be liable to a fine of up to 200,000 francs. If the offence is committed through negligence, the fine is up to 20,000 francs.

Any person who reduces the tax claim to the detriment of the state:a. by wilfully or negligently failing to declare or incorrectly declaring or concealing goods on import;b. by wilfully failing to provide information or providing false or incomplete information in response to an enquiry during an official audit or administrative procedure that has as its object the establishment of the tax claim or tax abatement;shall be liable to a fine not exceeding 800,000 francs.

An attempt to commit tax evasion is also an offence.

If the tax advantage is obtained on the basis of an incorrect return, the offence of tax evasion is not subject to a penalty until the period for correction of errors in the return has expired (Art. 72 para. 1) and the error has not been corrected.

Art. 97 Determination of the penalty and aggravated tax evasion

The fine is determined by applying Article 106 paragraph 3 of the Swiss Criminal Code (SCC)²⁰³; Article 34 SCC may be applied by analogy. If the tax advantage obtained by the act is greater than the threatened penalty and the offence was committed wilfully, the fine may be increased to a maximum of two times the tax advantage.

In aggravating circumstances, the maximum fine that the offence carries may be increased by half. At the same time, a custodial sentence not exceeding two years may be imposed. Aggravating circumstances are:a. soliciting one or more persons to commit an offence against VAT law;b. committing offences against VAT law for commercial gain.

Art. 98 Infringement of procedural obligations

Any person who wilfully or negligently:a. does not register as a taxable person;b. despite being issued with a written demand, does not submit a tax return on time;c. does not declare the tax in the right period;d. does not provide security properly;e. does not keep, complete, retain or present books of account, vouchers, business documents and other records properly;f. despite being issued with a written demand, does not give or gives false information, or does not declare or declares incorrectly the data and goods necessary for the tax imposition or for review of the tax liability;g. details on invoices VAT that is not payable or is not payable in the amount stated;h. by quoting a register number, falsely claims to be entered in the Register of Taxable Persons;i. despite being warned, obstructs, hinders or makes impossible the proper performance of an audit;shall be liable to a fine unless the offence carries a higher penalty under another provision.

Art. 99 Receiving untaxed goods

Any person who purchases, receives as a gift, receives as a pledge or otherwise takes possession of, conceals, helps to sell or brings into circulation goods, in respect of which they know or must assume that the import tax payable has been wilfully evaded shall be liable to the same penalty as applies to the principal offender.

Art. 100 Violations in business operations

If a fine not exceeding 100,000 francs would be applicable and if the tracing of the offenders under Article 6 ACLA²⁰⁴ would require investigations the cost of which would be disproportionate to the penalty otherwise forfeited, the authority may dispense with pursuing the offenders and instead order the business (Art. 7 ACLA) to pay the fine.

Art. 101 Concurrent offences

Articles 7, 9, 11 and 12 paragraphs 4 and 13 ACLA²⁰⁵ do not apply.

The imposition of a penalty under Article 98 letter a of this Act does not preclude the imposition of a penalty under Articles 96 and 97.

The imposition of a penalty under Article 14 ACLA precludes the imposition of an additional penalty for the same criminal act under Articles 96 and 97 of this Act.

If an act meets the criterion of evasion of import tax or of receipt of untaxed goods as well as offence to be pursued by the FOCBS against other federal tax decrees, the penalty for the most serious violation shall be imposed; it may be increased appropriately.

If the perpetrator through one or more acts fulfils the requirements for the imposition of two or more penalties that fall within the area of competence of the FTA, the penalty for the most serious violation shall be imposed; it may be increased appropriately.

Art. 102 Self-reporting

Taxable persons who report themselves for an offence under this Act before it comes to the attention of the competent authority will not be prosecuted if:a. they assist the authority in a reasonable manner in establishing the tax payable or refundable; andb. they make a serious effort to pay the tax due or refundable.

Non-taxable persons who report an offence under this Act that they have committed or have participated in will not be prosecuted.

A legal entity reports itself through its executive bodies or representatives. Joint and several liability under Article 12 paragraph 3 ACLA²⁰⁶ of the executive bodies or of the representatives does not apply and no prosecution will be brought.

A correction of the return under Article 72 paragraph 2 qualifies as self-reporting.

Art. 103 Prosecution

With the exception of Articles 63 paragraphs 1 and 2, 69 paragraph 2, 73 paragraph 1 last sentence and 77 paragraph 4, the ACLA²⁰⁷ governs prosecution.

Prosecution is the responsibility of the FTA for domestic tax and acquisition tax, and of the FOCBS for import tax.

In closely related criminal cases in which both the FTA and the FOCBS have jurisdiction, the FTA may by agreement with the FOCBS decide to join the prosecutions under one of the two authorities.

Prosecution may be dispensed with if the level of culpability and the consequences of the crime are negligible (Art. 52 SCC²⁰⁸). In these cases, a non-intervention or no-proceedings ruling is issued.

If the competent authority must also investigate or judge other offences to which the ACLA applies, paragraph 1 applies to all offences.

Art. 104 Procedural guarantees

The accused has the right to fair criminal proceedings in accordance with the Federal Constitution and the relevant legislation on criminal procedure.

The accused is not obliged to incriminate themselves in criminal proceedings.

The information (Art. 68 and 73) given by the accused in the criminal proceedings or evidence from an audit under Article 78 may be used in criminal proceedings only if the accused consents thereto.

The opening of a criminal investigation must be notified in writing to the suspect without delay unless there is good cause for not doing so.

Art. 105 Prescription of the right to prosecute

The right to initiate a criminal investigation prescribes as follows:a. for infringements of procedural obligations: at the time when the tax claim relating to the offence becomes legally binding;b.²⁰⁹ in relation to domestic and acquisition tax:1. in the case of contraventions under Article 96 paragraphs 1–3: six months after the relevant tax claim becomes legally binding,2. for tax evasion offences under Article 96 paragraph 4: two years after the relevant tax claim becomes legally binding,3. for offences under Article 97 paragraph 2 and under Articles 14–17 ACLA²¹⁰: seven years after the end of the relevant tax period;c.²¹¹ in relation to import tax: for all misdemeanours and contraventions under Articles 96, 97 paragraph 2 and 99 and in the case of misdemeanours under Articles 14–17 ACLA: in seven years;d. and e.²¹² …

The prescriptive period for prosecution ceases to apply if before expiry of the prescriptive period a summary penalty order or a judgment in the first instance is issued.

The prescriptive period for the payment and refund obligation under Article 12 ACLA is governed:a. in principle by Article 42;b. if an offence covered by Article 96 paragraph 4, 97 paragraph 2 or 99 or by Articles 14–17 ACLA is fulfilled, by paragraphs 1 and 2.

The right to conduct a criminal investigation that has already been initiated prescribes after five years; the prescriptive period is suspended for as long as the accused person is abroad.

Art. 106 Collection of fines and costs and prescription

The fines and costs imposed in the criminal proceedings in respect of tax offences are collected in accordance with Articles 86–90. Article 36 SCC²¹³ applies.

Prescription of the right to collect fines and costs are governed by Article 91.

Title 7 Final Provisions

Chapter 1 Implementing Provisions

Art. 107 Federal Council

The Federal Council:a. 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;b. 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;c.²¹⁵ regulates 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.

Art. 108 Federal Department of Finance

The FDF:a. defines market conform interest rates for interest on late payment and refunds and updates them periodically;b. determines the cases in which interest on late payment is not imposed;c. stipulates up to what amount negligible amounts of interest on late payment and refunds will not be imposed or are not payable;d.²¹⁷ determines what is deemed to be the amount that is so negligible that it need not be invoiced as provisional tax.

Art. 109 Consultative committee

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.

Chapter 2 Repeal and Amendment of Current Law

Art. 110 Repeal of current law

The VAT Act of 2 September 1999²¹⁹ is repealed.

Art. 111 Amendment of current law

The following federal acts are amended as follows:…²²⁰

Chapter 3 Transitional Provisions

Art. 112 Application of the previous law

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.

Art. 113 Application of the new law

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.

Art. 114 Election options

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.

Art. 115 Change of the tax rates

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.

Art. 115a²²² Transitional provision to the Amendment of 30 September 2016

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.

Art. 115b²²³ Transitional provisions to the amendment of 16 June 2023

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:a. the supplier is deemed to be a supplier in accordance with Article 20a;b. the suppler has achieved a turnover of at least 100,000 Swiss francs in the preceding twelve months by supplying such goods; andc. 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.

Chapter 4 Referendum and Commencement

Art. 116

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.

Transitional Provision to the Amendment of 19 March 2010²²⁶