Ordinance
on Value Added Tax
(Value Added Tax Ordinance, VAT Ordinance)

All permanent establishments on Swiss territory of a business domiciled abroad qualify together as a single independent taxable person.

Businesses with place of business, domicile or permanent establishment on Swiss territory that commence their activity or extend their activity by taking over a business or opening a new business division are exempt from tax liability if at the time, based on the circumstances, it must be assumed that the turnover threshold referred to in Article 10 paragraph 2 letter a or c VAT Act for supplies made on Swiss territory and abroad will not be achieved in the following twelve months. If it is not yet possible at the time to assess whether the turnover threshold will be achieved, a re-assessment must be carried out within three months at the latest.

Where it must be assumed based on the re-assessment that the turnover threshold will be achieved, the exemption from tax liability ends either:

1. on the date of commencement or expansion of the activity; or

2. on the date of the re-assessment, but at the latest at the beginning of the fourth month.

For businesses previously exempt from tax liability, the exemption from tax liability ends with the business year in which the relevant turnover threshold is achieved. If the activity giving rise to tax liability was not carried on for a full year, the turnover must be extrapolated to a full year.

Businesses that do not have a place of business, domicile or permanent establishment on Swiss territory that make a supply for the first time on Swiss territory are exempt from tax liability if at the time, based on the circumstances, it must be assumed that the turnover threshold referred to in Article 10 paragraph 2 letter a or c VAT Act for supplies made on Swiss territory and abroad not will be achieved within the following twelve months. If it is not yet possible at the time to assess whether the turnover threshold will be achieved, a re-assessment must be carried out within three months at the latest.

Where it must be assumed based on the re-assessment that the turnover threshold will be achieved, the exemption from tax liability ends either:

1. when a supply is made for the first time on Swiss territory; or

2. on the date of the re-assessment, but at the latest at the beginning of the fourth month.

For businesses previously exempt from tax liability, the exemption from tax liability ends with the business year in which the relevant turnover threshold is achieved. If the activity giving rise to tax liability was not carried on for a full year, the turnover must be extrapolated to a full year.

Telecommunication and electronic services are in particular:

1. radio and television services;

2. the provision of access authorisation, in particular to fixed line and mobile networks, to satellite communication and to other information networks;

3. the provision and guarantee of data transfer capacity;

4. the provision of websites, webhosting, and the tele-servicing of programs and equipment;

5. the electronic provision of software and its updating;

6. the electronic provision of images, texts and information and the provision of databases;

7. ¹²the electronic provision of music, films and games, including gambling.

Telecommunication or electronic services do not include in particular:

1. the mere communication between the persons providing and receiving the service by wire, wireless, optical or other electro-magnetic media;

2. educational services within the meaning of Article 21 paragraph 2 number 11 VAT Act in interactive form;

3. the mere lending for use of precisely designated equipment or equipment parts for the sole use of the lessee for the transmittal of data.

The sub-division of a public authority into agencies follows the classification in the financial accounts, provided this corresponds with the organisational and functional structure.

Other public law institutions covered by Article 12 paragraph 1 VAT Act are:

1. Swiss and foreign public corporations such as special-purpose associations;

2. public law institutions with their own legal personality;

3. public law foundations with their own legal personality;

4. simple partnerships of public authorities.

For purposes of cross-border collaboration, foreign public authorities may also be included in special-purpose associations and simple partnerships.

An institution within the meaning of paragraph 2 is a taxable person as a whole.

The following supplies in particular of public authorities are of a business character and therefore taxable:¹⁵

1. services in the field of radio and television, telecommunication services and electronic services;

2. supplies of water, gas, electricity, thermal energy, ethanol, denaturing agents and similar goods;

3. transport of goods and people;

4. services in harbours and airports;

5. supplies of new finished goods for sale;

6. ¹⁶...

7. organising fairs and exhibitions with a commercial character;

8. operating sports facilities, such as public baths and skating rinks;

9. warehousing;

10. activities of commercial advertising offices;

11. activities of travel agents;

12. supplies by factory canteens, staff restaurants, sales offices and similar establishments;

13. activities of public notaries;

14. activities of surveying offices;

15. activities in the field of waste disposal;

16. activities financed by prepaid disposal fees based on Article 32a^bis of the Environmental Protection Act of 7 October 1983¹⁷ (EPA);

17. activities in the course of the construction of traffic infrastructure;

18. exhaust gas inspections;

19. advertising services.

There is common management if the behaviour of a legal entity is controlled by the majority of the votes, by contract or by other means.

Unincorporated entities without legal capacity are equivalent to legal entities for the purpose of Article 13 VAT Act.

Insurance agents may be members of a group.

...¹⁸

The members of the VAT group may be freely determined from among those entitled to participate in the group taxation.

The formation of several sub-groups is permissible.

The group representative may be:

1. a member of the VAT group domiciled on Swiss territory; or

2. a person who is not a member of the VAT group but who is domiciled or has a place of business on Swiss territory.

On request, the FTA shall enter the group in the register of taxable persons (VAT register).

If the conditions set out in Article 13 paragraph 1 of the VAT Act for group taxation are met at the beginning of the tax period, the FTA shall register the group as of this date, provided that

1. none of the legal entities concerned has submitted a tax return for the tax period for which group taxation is requested; and

2. the deadline for submitting the tax return in accordance with Article 71 paragraph 1 of the VAT Act has not expired.

If the conditions set out in Article 13 paragraph 1 of the VAT Act for group taxation are only met during the current tax period, the FTA shall register the group as of this date, provided that

1. none of the legal entities concerned has submitted a tax return for the reporting? period in which the conditions for the application of group taxation were met; and

2. the deadline for submitting the tax return in accordance with Article 71 paragraph 1 of the VAT Act has not expired.

The request must enclose written declarations by each group member, in which they declare their consent to group taxation and its effects and to joint representation by the group member or person designated in the application.

Notice must be given to the FTA of any change in the representative of a VAT group.²¹

If the former group representative resigns and notice of a new group representative is not given to the FTA, the FTA may after prior warning designate one of the group members as the group representative.²²

The group members may jointly withdraw the mandate from the group representative provided that at the same time they designate a new group representative. Paragraph 1 applies by analogy.

If a member no longer fulfils the requirements for participating in the group taxation in accordance with Article 13 paragraph 1 VAT Act, the group representative must notify the FTA.

On request, the legal entity may join an existing group at the beginning of the following tax period or a member can leave a group at the end of the current tax period.

If a legal entity meets the requirements of Article 13 paragraph 1 VAT Act for participation in the group taxation for the first time during the current tax period, admission to an existing VAT group may also be applied at the time these requirements are met provided:

1. neither the VAT group nor the newly admitted legal entity has submitted a tax return for the reporting period in which the conditions for participation in group taxation were met; and

2. the deadline for submitting the tax return in accordance with Article 71 paragraph 1 of the VAT Act has not expired.

The members must close their accounts on the same balance sheet date; this does not apply to holding companies if for accounting reasons they have a different balance sheet date.

Every member must prepare an internal tax return, which must be consolidated in the VAT group’s return.

The joint and several liability of a member of a VAT group extends to all tax, interest and cost claims that arise during its membership, with the exception of fines.

If legal enforcement has been initiated against a group member, additional tax has been claimed by an assessment notice from the group representative or if an audit has been announced, a group member may not elude joint and several liability by withdrawing from the group.

When part of a claim to a consideration is assigned, the VAT is also assigned in the same proportion. Assignment of a net claim without VAT is not possible.

Liability under Article 15 paragraph 4 VAT Act is limited to the amount of the VAT amount that has actually been collected by the assignee during an enforcement procedure against the taxable person from the time of pledge or from the time bankruptcy proceedings are opened.

In a pledge or pledge realisation procedure against a taxable person, the FTA must inform the assignee immediately after receipt of the pledge deed of its liability.

After bankruptcy proceedings are opened against a taxable person, the FTA may claim on the liability of the assignee irrespective of prior notification.

By remitting to the FTA the VAT also assigned and collected with the claim the assignee is released in the same amount from the liability.

The provision of supplies to closely related persons constitutes a supply relationship. Assessment is governed by Article 24 paragraph 2 VAT Act.

Private organisations within the meaning of Article 32a^bis EPA²⁵ make supplies to manufacturers and importers through their activities. The prepaid disposal fees are a consideration for these services.

A supply relationship does not exist in the cross-border posting of employees within a group, if:

1. a foreign employer employs an employee in a deployment operation on Swiss territory belonging to the same group of companies or an employer employs an employee in a foreign deployment operation belonging to the same group;

2. the employee works for the deployment operation but retains the employment contract with the posting business; and

3. the wages, social security contributions and related expenses are charged by the posting employer to the deployment operation without a surcharge.

Subject to Article 18 paragraph 3 VAT Act, subsidies or other public contributions are in particular amounts paid by public authorities as:²⁶

1. financial assistance within the meaning of Article 3 paragraph 1 of the Subsidies Act of 5 October 1990²⁷ (SubA);

2. compensation within the meaning of Article 3 paragraph 2 letter a SubA, provided if a supply relationship exists;

3. research contributions, provided the public authority does not have an exclusive right to the results of the research;

4. cash flows comparable with letters a–c that are paid under cantonal and communal law.¨

A public authority may designate funds to the recipient as a subsidy or other contribution under public law up to the expiry of the deadline under Article 72 paragraph 1 of the VAT Act for the tax period in which the payment is made.²⁸

Cash flow remittances that do not constitute considerations under Article 18 paragraph 2 VAT Act, in particular within educational and research cooperation projects, are not subject to the tax.

The input tax deduction under Article 33 paragraph 2 VAT Act must be made by the last payment recipient.

Special tools that a taxable person purchases, has made to order, or makes specifically for the performance of a manufacturing contract constitute part of the supply of the goods that they are used to manufacture. It is irrelevant whether the special tools:

1. are invoiced to the recipient of the supply separately or are included in the price of the products;

2. are delivered to the recipient of the supply or to a third person designated by the recipient of the supply, or not after performance of the manufacturing contract.

Special tools are in particular printing plates, photolithos and photo settings, punching and draw tools, gauges, jigs, pressing and spraying forms, castings, foundry modules, dies and films for printed circuits.

Article 19 paragraph 2 VAT Act applies by analogy when determining whether in the case of combinations of supplies the place of supply is located on Swiss territory or abroad.

An import tax assessment under Article 112 also applies to the Swiss tax, provided the combination of supplies was not processed or changed after the import assessment.

Human medical treatment is the diagnosis and treatment of illnesses, injuries and other disorders of the physical and mental health of humans and activities that serve the prevention of human illnesses and health disorders.

The following are equivalent to human medical treatment:

1. special maternity services, such as check-ups, birth preparation or breast-feeding advice;

2. examinations, consultations and treatment related to artificial insemination, contraception or abortion;

3. supplies of goods and supplies of services by a doctor or a dentist when destined for a medical report or an expert opinion for the assessment of social security claims.

The following in particular do not constitute human medical treatment:

1. examinations, consultations and treatment solely for the purposes of enhancing wellbeing or performance or which are provided merely for aesthetic reasons, unless the examination, advice or treatment is provided by a doctor or dentist who is authorised to practise on Swiss territory;

2. the examinations carried out for the purpose of writing an expert report which are not related to a specific treatment of the person examined, except for the cases under paragraph 2 letter c;

3. the dispensing of medicines or of medical appliances, unless they are used by the person providing the treatment in the course of human medical treatment;

4. the dispensing of self-manufactured or purchased prostheses and orthopaedic equipment, even if this takes place in the course of human medical treatment; a prosthesis is a replacement body part that can be separated from the body without an operation and reinserted or attached;

5. basic care actions; these constitute nursing care services under Article 21 paragraph 2 number 4 VAT Act.

A provider possesses a licence to practise its profession within the meaning of Article 21 paragraph 2 number 3 VAT Act, if it:

1. is in possession of the licence to practise its profession independently required by the cantonal law; or

2. is accredited to provide human medical treatment in accordance with the cantonal law.

Members of human medical and nursing professions within the meaning of Article 21 paragraph 2 number 3 VAT Act are in particular:

• a. doctors;

• b. dentists;

• c. dental technicians;

• cbis. ³⁰dental hygienists;

• d. psychotherapists;

• dbis. ³¹psychologists;

• e. chiropractors;

• f. physiotherapists;

• g. ergotherapists;

• h. naturopaths, non-medical practitioners, natural non-medical practitioners;

• i. childbirth carers and midwives;

• j. nurses;

• k. medical masseurs and masseuses;

• l. speech therapists;

• m. dietary advisers;

• n. podologists;

• o. ³²…

• p. ³³pharmacists;

• q. ³⁴optometrists.

...³⁵

Creators within the meaning of Article 21 paragraph 2 number 16 VAT Act are creators of works under Articles 2 and 3 CopA, to the extent they provide cultural supplies of services and supplies of goods.

Interests of public authorities in private or public companies within the meaning of Article 21 paragraph 2 number 28 letter b VAT Act include both direct and indirect equity interests.

Institutions and foundations established by public authorities within the meaning of Article 21 paragraph 2 number 28 letter c VAT Act include institutions and foundations both directly and indirectly established by public authorities.

The tax exemption extends to:

1. supplies between private or public companies whose equity interests are held exclusively by public authorities, and:

   1. companies held exclusively by such companies, whether directly or indirectly, or

   2. the institutions and foundations of which they are the sole founders or sponsors;

2. supplies between institutions or foundations whose founders or sponsors are exclusively public authorities, and:

   1. the companies held exclusively by these institutions or foundations, whether directly or indirectly, or

   2. the institutions and foundations of which they are the sole founders or sponsors.³⁸

Educational and research institutions are:

1. higher education institutions supported by the Confederation and cantons under Article 63a of the Federal Constitution⁴⁰ in accordance with a legal basis;

2. non-profit organisations under Article 3 letter j VAT Act, and public authorities under Article 12 VAT Act;

3. public hospitals, irrespective of their legal form.

Private sector businesses do not qualify as educational and research institutions.

The option for declaration in the tax return must be exercised in the tax period in which the sales tax debt arose. On expiry of the finalisation deadline under Article 72 paragraph 1 VAT Act, it is no longer possible to exercise the option or not to continue with an exercised option.

Exempt from the tax with credit are:

1. transport by air where either the place of arrival or of departure lies on Swiss territory;

2. transport by air from one foreign airport to another foreign airport crossing Swiss territory.

Domestic sections of international flights are exempt from tax with credit if the flight is interrupted on Swiss territory only by a technical stopover or to change to a connecting flight.

Cross-border transport by rail is exempt from the tax with credit, subject to paragraph 2, provided it is a section of a journey for which there is an international ticket. This includes:

1. transport on sections of a journey where either the departure or the arrival station lies on Swiss territory;

2. transport on Swiss sections of a journey used in transit to link the departure and the arrival stations located abroad.

For the tax exemption with credit, the portion of the ticket price covering the foreign section of the journey must be higher than the VAT not chargeable because of the tax exemption with credit.

No tax exemption with credit is granted on the sale of flat price tickets, in particular the GA Travelcards and the Half-Fare Travelcards that are used in whole or part for tax exempt transport.

Exempt from the tax with credit is the transport of persons by bus or coach on sections of a journey which:

1. pass predominantly over foreign territory; or

2. are used in transit to link the places of departure and of arrival located abroad.

Exempt from the tax with credit is the transport of persons on purely Swiss sections of a journey solely in order to carry a person directly to a transport service under paragraph 1, provided it is invoiced together with the transport service under paragraph 1.

With the consent of the supplier in accordance with Article 20a of the VAT Act, the seller may invoice the deemed supply of goods on Swiss territory to the supplier with tax. Consent is not required if an administrative measure pursuant to Article 79a of the VAT Act has been imposed on the supplier in accordance with Article 20a of the VAT Act.

The supplier in accordance with Article 20a of the VAT Act may deduct the tax as input tax.

For purposes of calculating the VAT payable, considerations paid in foreign currency must be converted into national currency at the date the tax claim arises.

A consideration is in foreign currency if the invoice or the receipt is issued in foreign currency. If no invoice or receipt is issued, the book entry of the supplier applies. It is irrelevant whether the payment is in national or foreign currency and in which currency the change is paid.

The conversion is made on the basis of the rate of exchange published by the FTA, whereby the taxable person may elect to use the average monthly rate or the daily exchange rate.⁴⁵

Where the FTA does not publish an exchange rate for a foreign currency, the daily exchange rate for the sale of the foreign currency published by a Swiss bank applies.⁴⁶

Taxable persons that are members of a group of companies may use the group conversion rate for their conversion. This rate must be applied both to supplies within the group of companies and in relation to third parties.⁴⁷

The procedure chosen (monthly average, daily or group rates) must be retained for at least one tax period.

In particular credit card commissions, cheque charges, WIR rebates, etc. do not constitute reductions of considerations.

On supplies to employees for consideration, the tax must be calculated on the consideration actually received. Article 24 paragraphs 2 and 3 VAT Act is reserved.

Supplies made by the employer to employees which must be declared in the salary certificate are deemed to be made with consideration. The tax must be calculated on the amount that is also applicable for direct taxes.

Supplies which do not have to be declared in the salary certificate constitute supplies made without consideration and it is assumed that a business reason exists.

Where lump sums that are permissible for determining the wage elements applicable for direct tax purposes may also serve to assess the VAT, they may also be used for VAT purposes.

When applying paragraphs 2–4, it is irrelevant whether the persons concerned are closely related persons as stipulated under Article 3 letter h VAT Act.⁴⁸

The FTA shall establish for every fund the amount of the deduction in per cent which applies to the individual affiliated waste disposal organisations and waterworks.

It shall take into consideration that:

1. the fund does not pay out all the contributions received; and

2. the taxable customers of waste disposal services and water supplies have deducted the tax thereon invoiced to them in full as input tax.

Works of art means the following physical works by creators as referred to in Article 21 paragraph 2 number 16 VAT Act:

1. pictorial works personally created by artists such as oil paintings, water colours, pastels, drawings, collages and the like; exempted therefrom are plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes, hand-decorated manufactured articles, theatrical scenery, studio back cloths or the like of painted canvas;

2. original engravings, prints and lithographs, being impressions produced in limited numbers directly in black and white or in colour of one or more plates executed entirely by hand by the artist, irrespective of the process or of the material employed, but not including any mechanical or photomechanical process;

3. serigraphs that display the features of an original individually created artistic work, have been produced in limited numbers and have been executed from reproduction forms completely hand-made by the creator;

4. original sculptures and statuary, in any material, provided that they are executed entirely by the artist; sculpture casts the production of which is in limited numbers and supervised by the artist or his successors in title;

5. tapestries and wall textiles made by hand from original designs provided by artists, provided that the production is in limited numbers;

6. individual pieces of ceramics executed entirely by and signed by the artist;

7. enamels on copper, executed entirely by hand, produced in limited numbers and bearing the signature of the artist or the studio;

8. photographs taken by the artist, printed by the artist or under the artist’s supervision in limited numbers, and signed and numbered by the artist;

9. works of art personally created by the artist in limited numbers that are not mentioned in letters a–h.

Antiques are moveable goods that are more than 100 years old.

Collectors’ items are in particular also:

1. postage stamps, revenue stamps, postmarks first-day covers, postal stationery and the like, used, or if unused not current and not intended to be current;

2. zoological, botanical, mineralogical or anatomical collectors’ items and collections; collectors’ items of historic, archaeological, palaeontological, ethnological or numismatic interest;

3. motor vehicles first registered on purchase more than 30 years previously;

4. wines and other alcoholic beverages the vintage of which is displayed and which may be individualised by numbering or by other means;

5. goods made of precious metal, clad with precious metal, gemstones, precious stones and the like, such as jewellery, watches and coins, that have a collector’s value.

Where the reseller has purchased collectors’ items for a total price, it must apply the margin taxation to the sale of all these collectors’ items.

The consideration from the resale of individual collectors’ items purchased for a total price must be declared in the reporting period in which it was generated. As soon as the considerations exceed the total price when added together, they become taxable.

Where collectors’ items are purchased with other goods for a total price the margin taxation only applies if the portion of the purchase price attributable to the collectors’ items can be estimated.

Where the taxable person details the tax on the resale of collectors’ items clearly on the invoice, it must pay the tax and may neither apply margin taxation nor deduct the notional input tax.

A person who is deemed to be a supplier under Article 20a of the VAT Act may only apply margin taxation if the seller of the goods is domiciled on Swiss territory and is not entered in the VAT register.

Medication is defined as:

1. authorised ready-to-use medicinal products and premixed veterinary medicinal products in accordance with Article 9 paragraph 1 of the Therapeutic Products Act of 15 December 2000⁵² (TPA) and the related finished Galenic products;

2. ⁵³ready-to-use medicinal products that do not require authorisation under Article 9 paragraphs 2 and 2^ter TPA, with the exception of human and animal whole blood;

3. ⁵⁴ready-to-use medicinal products that have been temporarily authorised under Article 9a TPA or temporarily licensed under Article 9b TPA;

4. ⁵⁵non-authorised ready-to-use medicinal products under Articles 48 and 49 paragraphs 1–4 of the Medicinal Products Licensing Ordinance of 14 November 2018⁵⁶ and Article 7–7c of the Veterinary Medicinal Products Ordinance of 18 August 2004⁵⁷.

Newspapers and magazines without advertising character are printed matter that fulfils the following conditions:

1. they appear periodically, at least twice a year;

2. they provide up-to-date information or entertainment;

3. they always bear the same title;

4. they are consecutively numbered and contain the date and the frequency of publication;

5. they are presented as newspapers or magazines;

6. they are not made up predominantly of space for entering text or other material.

Electronic newspapers and magazines without advertising character are electronic products that:

• a. are transmitted electronically or offered on data carriers;

• b. are predominantly text or image-based; and

• c. essentially fulfil the same purpose as printed newspapers and magazines under Article 50.

• ² Electronic newspapers and magazines without advertising character also include audio newspapers and magazines whose content largely corresponds to that of the original work.

Printed matter which fulfils the following conditions constitutes books and other printed matter without advertising character:

1. they are in the form of books, brochures or loose-leaf books; loose leaf products are books if they consist of a binding cover, fitted with a screw post, spiral or ring binder and the loose leaf pages to be filed therein contain when complete at least 16 pages and the title of the work appears on the binding cover;

2. including the jacket and the cover page they contain at least 16 pages, with the exception of children’s books, printed music and parts of loose-leaf works;

3. the content is religious, literary, artistic, entertaining, educational, instructive, informative, technical or scientific;

4. they are not designed to be written in or to store pictures for collection, with the exception of school and instruction books and certain children’s books, such as exercise books with illustrations and supplementary text and drawing and painting books with designs and instructions.

Electronic books without advertising character are electronic products that:

• a. are transmitted electronically or offered on data carriers;

• b. are self-contained, predominantly text or image-based and non-interactive individual works; and

• c. serve essentially the same function as printed books in terms of Article 51.

• ² Electronic books without advertising character also include audiobooks whose content largely corresponds to that of the original work.

Printed and electronic products have advertising character if their content is clearly designed to promote the business activity of the publisher or of a third party behind the publisher.

Third parties behind a publisher are:

1. persons and businesses, on whose behalf the publisher acts; or

2. other persons closely related to the publisher within the meaning of Article 3 letter h VAT Act.

Advertising is both direct advertising, such as advertisements, and indirect advertising, such as advertorials or infomercials.

Preparation is the cooking, heating, mixing, preparation and blending of food⁶¹. The mere maintaining of the temperature of food ready for consumption is not considered preparation.

Food service is in particular the arrangement of food on plates, the setting up of cold or warm buffets, the pouring of drinks, the laying and clearing of tables, the serving of the guests, the management or supervision of the serving staff and the operation and provisioning of self-service buffets.

Special installations for the consumption of food on the premises (consumption installations) consist of tables, bar tables, counters and other eating surfaces provided for consumption or similar installations, in particular in means of transport. It is irrelevant:

1. to whom the installations belong;

2. whether the customer actually uses the installation;

3. whether the installations are sufficient to enable all customers to consume on the premises.

The following do not constitute consumption installations:

1. mere seating accommodation for resting purposes without associated tables;

2. in kiosks or restaurants on camping sites: the tents and caravans of the tenants.

Delivery is the supply of food by the taxable person to customers at their homes or to another place designated by them without further preparation or service.

Takeaway food is food which the customer takes after purchase to another place and does not consume on the premises of the supplier. The following in particular characterise takeaway food:

1. the will expressed by the customer to take the food away;

2. the handing over of the food in a special package suitable for transport;

3. the handing over of food that is not suitable for immediate consumption.

The FTA shall provide for simplifications within the meaning of Article 80 VAT Act for certain businesses and events.

A suitable organisational measure is in particular the issue of receipts that indicate whether a restaurant supply, a delivery of food or a supply of goods for takeaway was provided.

Article 45 applies by analogy to the calculation of the deductible input taxes.

The Swiss tax is deemed to be invoiced if it is recognisable to the recipient of the supply that the supplier has demanded payment of the VAT from it.

The recipient of the supply does not have to verify whether the VAT was rightly demanded. If, however, it knows that the person that has transferred the tax is not registered as a taxable person, an input tax deduction is not permitted.

Precious metals with tariff numbers 7106–7112⁶⁵ and gemstones with tariff numbers 7102–7105 are not individualisable moveable goods.

Where exclusively individualisable moveable goods are purchased for a total price, notional input tax may be deducted.⁶⁶

The deduction of notional input tax is not permitted if the total price covers any collectors’ items (Art. 48a) or non-individualisable moveable goods and the share of the purchase price attributable to goods referred to in Article 28a VAT Act cannot be estimated.

The deduction of notional input tax is not permitted where:

1. the notification procedure under Article 38 VAT Act was applied on the purchase of the good;

2. the taxable person imported the good;

3. ⁶⁷goods have been purchased in accordance with Article 23 paragraph 2 number 12 VAT Act;

4. the taxable person knows or should have known that the good was imported exempt from the tax.

5. ⁶⁸the taxable person obtained the goods from a beneficiary in accordance with Article 2 of the Host State Act of 22 June 2007⁶⁹ (HSA).

In the case of payments made under the claim settlement, notional input tax may only be deducted based on the actual value of the good at the time that it is taken over.

Any person who is deemed to be a supplier under Article 20a of the VAT Act may only deduct notional input tax if the seller of the goods is domiciled on Swiss territory and is not entered in the VAT register.⁷⁰

Repealed

The correction of the input tax deduction may be calculated:

1. according to effective usage;

2. using flat rate methods with flat rates laid down by the FTA;

3. based on own calculations.

The FTA lays down flat rates in particular for:

1. businesses of banks;

2. the business of insurance companies;

3. businesses of specially financed agencies of public authorities;

4. the granting of loans and for interest income and income from trading in securities;

5. the management of owned immovable property where taxation is not opted for under Article 22 VAT Act;

6. public transport businesses.

If the taxable person bases the correction of the input tax deduction on its own calculations, it must give evidence in detail concerning the facts underlying the calculations and carry out a plausibility test.

The taxable person may use one or more methods to calculate the correction of the input tax deduction, provided the method(s) lead to an adequate result.

Adequate is any use of one or more methods that takes account of the principle of efficiency of imposition, is auditable economically and allocates the input taxes according to their use for a particular activity.

The input tax deduction must be corrected in full on goods and services not put to use.

The input tax deduction must be corrected on goods and services put to use that are still available at the time the requirements are no longer fulfilled and have a fair value. In the case of supply of services in the fields of consulting, accounting, staff recruitment, management and advertising, it is assumed they are exhausted at the time of their acquisition and are no longer available.

In the case of self-manufactured goods, for putting the infrastructure to use, a flat rate surcharge of 33 per cent must be made on the input taxes on materials and on any third-party work on semi-finished goods. Alternatively, effective proof of the input taxes applicable to the use of the infrastructure may be provided.

If subsequently the requirements for the input tax deduction are only partially fulfilled, the correction must be made to the extent that the use no longer entitles the input tax deduction to be made.

The fair value must be calculated on the basis of the acquisition cost, for real estate excluding the value of the land and of value enhancing expenditures. Not to be considered are, however, the value maintenance expenditures. Value maintenance expenditures are those that serve only to maintain the value of the good and its ability to function, in particular service, maintenance, operating and repair costs.

In determining the fair value of goods and services put to use, in the first tax period of use the loss in value must be considered for the entire tax period. In the last uncompleted tax period, on the other hand, no depreciation may be made unless the change in use occurs on the last day of the tax period.

If the renovation costs in a construction phase exceed in total 5 per cent of the insurance value of the building prior to renovation, the input tax deduction must be corrected on the basis of the total costs, regardless of whether the costs are for value enhancing or maintenance expenditures.

The input tax deduction may be corrected in full on goods and services not put to use.

The input tax deduction may be corrected on goods and services put to use which still exist and have a fair value at the time the requirements for the input tax deduction are fulfilled. For services in the fields of consulting, accounting, staff recruitment, management and advertising, it is assumed that they are used on acquisition and thereafter cease to exist.

In the case of self-manufactured goods, for putting the infrastructure to use, a flat rate surcharge of 33 per cent may be made on the input taxes on materials and on any third-party work on semi-finished goods. Alternatively, effective proof of input taxes applicable to the use of the infrastructure may be provided.

If subsequently the requirements for the input tax deduction are only partially fulfilled, the correction may be made only to the extent of the use entitling the input tax deduction to be made.

The fair value must be calculated on the basis of the acquisition cost, for real estate excluding the value of the land and of value enhancing expenditures. Not to be considered are, however, the value maintenance expenditures. Value maintenance expenditures are those that serve only to maintain the value of the good and its ability to function, in particular service, maintenance, operating and repair costs.

In determining the fair value of goods and services put to use, in the first tax period of use the loss in value must be considered for the entire tax period. In the last uncompleted tax period, on the other hand, no depreciation must be made unless the change in use occurs on the last day of the tax period.

If the renovation costs in a construction phase exceed in total 5 per cent of the insurance value of the building prior to renovation, the entire input tax deduction may be corrected on the basis of the total costs, regardless of whether the costs are for value enhancing or maintenance expenditures.

The input tax need not be reduced if the funds under Article 18 paragraph 2 letters a–c VAT Act are attributable to a business activity for which no input tax is incurred or for which no claim to input tax deduction exists.

To the extent the funds under Article 18 paragraph 2 letters a–c VAT Act can be attributed to a specific business activity, only the input tax on the expenditures for this business activity must be reduced.

If the funds under Article 18 paragraph 2 letters a–c VAT Act are paid to cover an operating deficit, the input tax must be reduced in the proportion of these funds to the total income. The total income is made up of the total turnovers excluding VAT and the income that does not count as considerations.⁷¹

Persons newly entered in the VAT register who wish to use annual reporting must apply to the FTA no later than 60 days after receiving their VAT number.

The FTA shall authorise the application of annual reporting if the expected turnover with VAT in the first twelve months does not exceed the threshold set out in Article 35 paragraph 1^bis letter b of the VAT Act.

After the deadline in paragraph 1 has expired, the taxable person may apply for annual reporting after one tax period at the earliest.

Taxable persons who wish to change to annual reporting must apply to the FTA no later than 60 days after the start of the tax period from which the change is to take place.

The FTA shall authorise annual reporting if the taxable person:

1. did not exceed the turnover threshold of Article 35 paragraph 1^bis letter b of the VAT Act in the previous tax period; and

2. has submitted all tax returns on time and has paid all tax claims in full and on time in the previous three tax periods or, if the liability has existed for a shorter period, since commencement of tax liability.

Taxable persons who no longer wish to use annual reporting must notify the FTA no later than 60 days after the start of the tax period from which the change is to take place.

The FTA shall revoke authorisation for the annual reporting:

1. at the beginning of the next tax period if the taxable person has exceeded the turnover threshold specified in Article 35 paragraph 1^bis letter b of the VAT Act for three consecutive tax periods;

2. at the beginning of the tax period after the next tax period if:

   1. the taxable person has applied for a reduction in the instalments as a result of which the total of the instalments in the current tax period falls below the following value in relation to the amount of tax due according to the tax return:

      • – in the case of the effective reporting method and reporting with flat tax rates: 50 per cent

      • – in the case of reporting with net tax rates: 35 per cent,

   2. the FTA has determined the amount of tax due at its own discretion on the basis of the second sentence of Article 86 paragraph 2 VAT Act due to failure to submit the tax return, or

   3. the FTA has initiated debt enforcement proceedings on the basis of the first sentence of Article 86 paragraph 2.

The instalments may only be adjusted before they become due.

The taxable supplies made for consideration on Swiss territory must be considered in assessing whether the conditions under Article 37 VAT Act are fulfilled.

The net tax rate method may not be chosen by taxable persons who:

1. may report using the flat tax rate method under Article 37 paragraph 5 VAT Act;

2. use the transfer procedure under Article 63 VAT Act;

3. use group taxation under Article 13 VAT Act;

4. have their place of business or a permanent establishment in the valley areas of Samnaun or Sampuoir;

5. ⁷⁴generate more than 50 per cent of their turnovers from taxable supplies to another taxable person who reports using the effective method where the persons involved are under the same management;

6. ⁷⁵make supplies on Swiss territory based on Article 7 paragraph 3 VAT Act.

7. ⁷⁶are deemed to be suppliers in accordance with Article 20a of the VAT Act;

8. ⁷⁷have their place of business abroad.

Taxable persons who report using the net tax rate method may not opt for the taxation of supplies under Article 21 paragraph 2 numbers 1–24 and 27–31 VAT Act. If the tax is nevertheless invoiced, the tax charged must be paid to the FTA with reservation of Article 27 paragraph 2 VAT Act.⁷⁸

Persons newly entered in the VAT Register who wish use the net tax rate method must notify the FTA within 60 days of notification of their VAT number.

The FTA shall approve the use of the net tax rate method if in the first 12 months both the expected turnover and the expected taxes do not exceed the thresholds in Article 37 paragraph 1 VAT Act.

If no request is made within the period in paragraph 1, the taxable person must report for at least three full tax periods using the effective reporting method before they may change to the net tax rate method. An earlier change of the reporting method is possible at the time of any adjustment to the net tax rate that is not due to a change in the rates of taxation under Articles 25 and 55 VAT Act.

Paragraphs 1–3 apply to retroactive entries analogously.

The tax charged on goods and services on commencement of tax liability is taken into account in applying the net tax rate method. No subsequent input tax deduction may be made.

Taxable persons who wish to change from the effective reporting method to the net tax rate method must notify the FTA at the latest 60 days after the beginning of the tax period from which the change is to be made.

The FTA shall approve the use of the net tax rate method if in the prior tax period neither of the thresholds in Article 37 paragraph 1 VAT Act was exceeded.

The input tax previously deducted on the fair value of the goods and services at the time of the change, including the portion corrected as a subsequent input tax deduction, must be refunded to the FTA. The declaration must be made in the last reporting period before the change. Article 31 paragraph 3 VAT Act and Article 69 paragraphs 1–3, 70 and 71 apply by analogy.

If simultaneously with the change to the net tax rate method the manner of reporting under Article 39 VAT Act is changed, the following corrections must also be made as per the date of the change:

• if a change is made from agreed to collected considerations, the taxable person must reverse the following in the last reporting period before the change:

  1. the declared tax on the taxable supplies invoiced but not yet paid on the date of change (debtor items); and

  2. the input tax deduction on the taxable supplies invoiced to it but not yet paid (creditor items), insofar as these are input taxes that do not already have to be corrected on the basis of paragraph 3.

• if a change is made from collected to agreed considerations, the taxable person must in the last reporting period before the change:

  1. declare the tax on the existing debtor items at the appropriate statutory tax rate; and

  2. deduct the tax charged on the creditor items as input tax.

The FTA may retroactively withdraw approval to use this reporting method from taxable persons who have been permitted to use the net tax rate method on the basis of false information.

Taxable persons who wish to change from the net tax rate method to the effective reporting method must notify the FTA at the latest 60 days before the beginning of the tax period from which the change is to be made.

A change is permitted before the end of the entire tax period if reporting is carried out with at least one authorised net tax rate that the FTA has adjusted, unless this is due to a change in the tax rates in accordance with Articles 25 and 55 VAT Act. The change takes place at the time of the change in the net tax rate.

Persons who exceed one or both thresholds laid down in Article 37 paragraph 1 VAT Act in three consecutive tax periods must change to the effective reporting method at the beginning of the following tax period.

The tax charged on the fair value of the goods and services at the time of the change may be deducted as input tax in the first reporting period after the change. Article 32 paragraph 2 VAT Act and Articles 72 paragraphs 1–3, 73 and 74 apply by analogy.

If at the same time as the change to the effective reporting method the manner of reporting under Article 39 VAT Act is also changed, the following corrections must be made as of the date of change:

• If a change is made from agreed to collected considerations, the taxable person must deduct the tax declared on the debtor items in the last reporting period before the change; in addition, the tax must be charged on the creditor items for which a subsequent input tax deduction is permitted on the basis of paragraph 4.

• If a change is made from collected to agreed considerations, the taxable person must declare the tax on the debtor items at the authorised net tax rates in the last reporting period before the change; no corrections shall be made to the creditor items.

If a taxable person reporting under the net tax rate method ceases its business activities or if, due to failing to reach the turnover threshold in Article 10 paragraph 2 letter a VAT Act, it is exempt from tax liability, the turnovers generated prior to being removed from the VAT Register, the work in progress and, if reporting according to collected considerations, the debtor items are also to be reported at the approved net tax rates.

…⁸²

If a taxable person reporting under the net tax rate method using the notification procedure under Article 38 VAT Act takes over all of the assets, part of the assets or individual assets from a person using the effective reporting method, a correction must be made in accordance with Article 79 paragraph 3; paragraph 2 remains reserved.

No correction shall be made if all of the assets, part of the assets or individual assets have been used by the seller for an activity not entitling a deduction of the input tax.

Taxable persons must report their business activities at the net tax rates approved by the FTA.

If a business activity ceases or a new business activity is begun or if the turnover shares of the business activities change in such a way that a new allocation of the net tax rates becomes necessary, the taxable person must contact the FTA.

Taxable persons for whom two or more different net tax rates have been approved must record the revenues for each of the net tax rates separately.⁸⁴

For each activity that accounts for more than 10 per cent of total turnover from taxable supplies, the net tax rate for this activity shall be authorised.

The following are decisive for determining whether the 10 per cent threshold has been exceeded:

1. for persons who become newly taxable and for taxable persons who take up a new business activity: the expected turnovers in the first 12 months;

2. in the case of other taxable persons, the turnover achieved in the three previous tax periods, whereby the share of the relevant activity in the total turnover from taxable supplies must have been more than 10 per cent in each of these tax periods.

The turnovers from business activities with the same net tax rate must be accumulated when determining whether the 10 per cent threshold has been exceeded.

If the turnover for an activity or the turnover for several activities for which the same net tax rate applies no longer exceeds the 10 per cent threshold for three consecutive tax periods, authorisation to apply the relevant net tax rate lapses at the beginning of the fourth tax period

Turnovers from the business activities of a taxable person who has been authorised to apply more than one net tax rate must be taxed at the authorised net tax rate specified for the activity in question.

If the net tax rate stipulated for an activity has not been authorised, the turnover generated is taxable as follows:

1. at the next lower authorised net tax rate if no higher rate is authorised;

2. at the next higher authorised net tax rate in other cases.

In cases under Article 19 paragraph 2 VAT Act, the entire consideration may be reported at the approved net tax rate applicable to the predominant supply in accordance with Articles 84 and 86 and paragraphs 1 and 2.

If the services are all subject to the same tax rate in accordance with Article 25 VAT Act, the individual supplies must be reported at the net tax rates authorised for this purpose.

If the taxable person is unable to prove what proportion is attributable to the individual supplies, the total consideration must be reported at the highest net tax rate that has been authorised for these supplies.

The taxable person may voluntarily report the entire turnover from taxable supplies at the highest authorised net tax rate.

The FTA provides businesses and events in accordance with Article 55 paragraph 3 with a flat-rate arrangement for the allocation of turnover to catering services and sales of take-away food in accordance with Article 55 paragraph 2.

Taxable persons using the net tax rate method who acquire supplies under Article 45 paragraph 1 VAT Act, must pay the acquisition tax in the relevant reporting period at the appropriate statutory tax rate.

Own use is taken into account in applying the net tax rate method.

Supplies to closely related persons and employees must be reported at the authorised net tax rate applicable to the supply in question in accordance with Article 84, 86 and 88.

Supplies that must be included in the salary certificate for direct tax purposes always constitute supplies for consideration. The tax must be calculated on the basis of the amount that is also applicable for direct tax purposes.

Sales of equipment and fixed assets and capitalisable services that are not used exclusively to provide supplies that are exempt from the tax without credit must be reported at the approved net tax rate for the supply concerned in accordance with Articles 84, 86 and 88.

If a taxable person reporting using net tax rates invoices a supply at an excessive tax rate, the person must, in addition to the VAT calculated at the net tax rate, also pay the difference between the tax calculated using the tax rate disclosed and the tax calculated using the tax rate under Article 25 VAT Act. The consideration is regarded as including VAT.

Related institutions under Article 37 paragraph 5 VAT Act are in particular:

1. communal associations and other combinations of public authorities;

2. parishes;

3. private schools and boarding schools;

4. private hospitals and medical treatment centres;

5. rehabilitation centres and sanatoria;

6. private home care organisations;

7. old people’s homes, nursing homes and seniors’ residences;

8. charitable businesses, such as disabled workshops, hostels and special schools;

9. operators of sports facilities and cultural centres subsidised by public authorities;

10. cantonal buildings insurers;

11. water cooperatives;

12. public transport businesses;

13. corporations subsidised by public authorities;

14. organisers of non-recurring cultural and sports events;

15. associations under Articles 60–79 of the Civil Code(CC)⁹⁶; and

16. foundations under Articles 80–89^bis CC.⁹⁷

There are no monetary thresholds for the use of the flat tax rate method.

Taxable persons who report using the flat tax rate method may not opt for the taxation of supplies under Article 21 paragraph 2 numbers 1–24, 27 and 29–31VAT Act. If the tax is nevertheless invoiced, the tax charge must be paid to the FTA with reservation of Article 27 paragraph 2 VAT Act.⁹⁸

Autonomous agencies under Article 12 paragraph 1 VAT Act that merge to form a single taxable entity (Art. 12 para. 2 VAT Act) may apply the flat rate tax method.⁹⁹

Public authorities and related institutions under Article 97 paragraph 1 which wish to report using the flat tax rate method must notify the FTA.

The flat tax rate method must be retained for at least an entire tax period. If the taxable person elects for the effective reporting method, the person may change to the flat tax rate method at the earliest after an entire tax period.

An earlier change to the effective method or the flat-rate method is permitted whenever the flat-rate tax rate concerned is adjusted, unless this is due to a change in the rates of taxation under Articles 25 and 55 VAT Act.

Changes to the reporting method are possible at the beginning of a tax period. They must be notified to the FTA at the latest 60 days after the beginning of the tax period from which the change is to be made.

When using the flat tax rate method, the tax claim is determined by multiplying the total of the considerations generated in a reporting period, including tax, by the flat tax rate approved by the FTA.

The FTA establishes the flat tax rates taking account of the input tax amounts usual in the relevant branch of the industry. A business activity for which no flat tax rate has been established must be reported at the rate applicable for the net tax rate method.

The taxable person must report each of its business activities with the appropriate flat tax rate irrespective of the amount of turnover generated. The taxable person may voluntarily report the entire turnover from taxable supplies at the highest authorised flat tax rate.¹⁰¹

Unless this Section provides otherwise, Articles 77–96 also apply.

Every smallest unit in a business that is viable by itself constitutes a part of the assets.

The notification procedure must also be used if the purchaser only becomes liable for the tax in connection with the transfer of all or part of the assets.

If the notification procedure is used, this must be stated on the invoice.

Provided both parties are liable for the tax, the notification procedure may be used:

1. on the transfer of immovable property or parts of immovable property;

2. on application of the transferring person, if there are material interests.

It is assumed that the seller has used the assets transferred entirely for the business activities entitling the input tax deduction. A different degree of use must be proved by the purchaser.

On changing from reporting under the collected considerations to reporting under the agreed considerations method, the taxable person must in the reporting period following the change:

1. report the tax on the debtor items existing at the time of change; and

2. deduct the input taxes on the creditor items existing at the time of change in connection with the business activities entitling the input tax deduction.

On changing from reporting under the agreed considerations to the collected considerations method, the taxable person must in the reporting period following the change:

1. deduct the debtor items existing at the time of change from the considerations collected in this reporting period; and

2. deduct the input taxes on the creditor items existing at the time of the change from the input taxes paid in this reporting period.

If simultaneously with the change in the form of reporting the reporting method under Articles 36 and 37 VAT Act is also changed, Article 79 paragraph 4 or Article 81 paragraph 6 applies.

If the taxable person changes from reporting on the basis of the collected considerations to reporting on the basis of the agreed considerations, they must, in the reporting period following the change, account for the debtor items existing at the time of the change at the authorised net tax rates or flat tax rates that apply in accordance with Articles 84, 86 and 88 for the activities from which these debtor items arise.¹⁰³

If the taxable person changes from reporting on the basis of the agreed considerations to reporting on the basis of the collected considerations, they must, in the reporting period following the change, deduct the debtor items existing at the time of the change from the considerations collected in this reporting period in respect of the relevant activities.¹⁰⁴

If at the same time as changing of the form of reporting the reporting method is also changed, Article 79 paragraph 4 or Article 81 paragraph 6 applies.

On assignment and pledge of the tax claim, the confidentiality provisions under Article 74 VAT Act do not apply.

Articles 957–958f of the Code of Obligations¹²⁰ and the Accounts Ordinance of 24 April 2002¹²¹ apply to the transmission and retention of paperless receipts.

If the electronic procedure is mandatory, all submissions to the FTA must be made electronically via the portal provided for this purpose.

The electronic procedure is mandatory for:

1. …

2. annual reporting (Art. 35a and 86a VAT Act);

3. …

4. …

5. registration as a taxable person (Art. 66 para. 1 VAT Act);

6. …

7. filing returns (Art. 71 VAT Act);

8. correction of errors in returns (Art. 72 VAT Act).

When using the effective reporting method, the taxable person must for reporting to the FTA record the following figures in a suitable manner:

1. the total of all considerations subject to Swiss tax; this includes in particular the considerations for:

   1. taxed supplies, classified by tax rates,

   2. supplies that are taxed voluntarily under Article 22 VAT Act (Option),

   3. supplies that are exempt from the tax under Article 23 VAT Act,

   4. supplies to beneficiaries under Article 2 HSA¹²⁴ that are exempt from the VAT under Article 143 of this Ordinance,

   5. supplies for which the notification procedure under Article 38 VAT Act was used,

   6. supplies that are exempt from tax without credit under Article 21 VAT Act;

2. abatements of the consideration when reporting under agreed considerations, to the extent they are not taken into consideration in another field;

3. the following, which do not fall within the scope of VAT:

   1. considerations from supplies, whose place of supply lies abroad under Articles 7 and 8 VAT Act,

   2. flows of funds not qualifying as considerations under Article 18 paragraph 2 let. a–c VAT Act,

   3. other flows of funds not qualifying as considerations under Article 18 paragraph 2 let. d–l VAT Act;

4. the total of the considerations for supplies subject to the acquisition tax, classified by tax rates;

5. the total of all deductible input taxes before corrections and reductions under letter f, classified into:

   1. input tax on cost of materials and services,

   2. input tax on investments and other operating costs,

   3. de-taxation;

6. the amounts by which the input tax deduction must be corrected or reduced as a result of:

   1. mixed use under Article 30 VAT Act,

   2. own use under Article 31 VAT Act,

   3. receipt of flows of funds that do not constitute considerations under Article 33 paragraph 2 VAT Act;

7. the total of the import tax reported under the transfer procedure.

The FTA may consolidate several figures under paragraph 1 into one field of the reporting form or refrain from requiring them in the periodic reporting.

When using the net tax rate or flat tax rate method, the taxable person must record the following figures in a suitable manner for reporting to the FTA:

• a. the total of all considerations subject to Swiss tax; this includes in particular the considerations for:

  1. taxed supplies, classified by net tax rates or flat tax rates,

  2. supplies that are exempt from the tax under Article 23 VAT Act,

  3. supplies to beneficiaries under Article 2 HSA¹²⁵ that are exempt from VAT under Article 143 of this Ordinance,

  4. supplies for which the notification procedure under Article 38 VAT Act was used,

  5. supplies that are exempt from the tax without credit under Article 21 VAT Act;

• b. abatements of the consideration when reporting under agreed considerations, to the extent they are not taken into consideration in another field;

• c. the following, which do not fall within the scope of VAT:

  1. considerations from supplies, whose place of supply lies abroad under Articles 7 and 8 VAT Act,

  2. flows of funds not qualifying as considerations under Article 18 paragraph 2 letters a–c VAT Act,

  3. other flows of funds not qualifying as considerations under Article 18 paragraph 2 letters d–l VAT Act;

• d. the total of the considerations for supplies subject to the acquisition tax classified by tax rates;

• e. and f. ¹²⁶…

• g. ¹²⁷corrections in accordance with Articles 79 paragraphs 3 and 4, 81 paragraphs 4 and 5¹²⁸ and 83 paragraph 1.

The FTA may consolidate several figures under paragraph 1 under one field of the reporting form or refrain from requiring them in the periodic reporting.

The FTA may require the taxable person to submit, in particular, the following documentation:

1. a summary of the details mentioned in Article 126 or 127 for the entire tax period (declaration for the tax period);

2. the duly signed annual accounts or, if the taxable person is not required to keep books of account, a schedule of the receipts and expenditures as well as of the assets of the business at the beginning and end of the tax period;

3. the audit report, if one must be issued for the taxable person;

4. a turnover reconciliation under paragraph 2;

5. for taxable persons who report using the effective reporting method, an input tax reconciliation under paragraph 3;

6. for taxable persons who report using the effective reporting method, a schedule showing the calculation of the input tax corrections and reductions undertaken, from which the input tax corrections under Article 30 VAT Act, the own use cases under Article 31 VAT Act and the input tax reductions under Article 33 paragraph 2 VAT Act is apparent.

From the turnover reconciliation it must be apparent how the declaration for the tax period, taking account of the different tax rates or the net tax rates and flat tax rates can be reconciled with the annual accounts. To be considered in particular are:

1. the operating turnover reported in the accounts;

2. the revenues booked on expense accounts (expense reductions);

3. the charges within a group of companies that are not included in the operating turnover;

4. the sales of equipment;

5. the advance payments;

6. the other receipts that are not included in the operating turnover;

7. the payments in kind;

8. the reductions in earnings;

9. the bad debts; and

10. the closing entries, such as periodic accruals and deferrals, the provisions and internal re-bookings that are not turnover relevant.

From the input tax reconciliation it must be apparent that the input taxes according to the input tax accounts or to other records have been reconciled with the input taxes declared.

The demand for additional documentation under paragraphs 1–4 does not represent a demand for comprehensive documentation within the meaning of Article 78 paragraph 2 VAT Act.

Errors in past returns must be corrected separately from the ordinary returns.

The FTA shall designate a person responsible for data protection and data security advice.

This person shall monitor compliance with the data protection provisions and in particular ensure that a regular review is made of the accuracy and security of the data.

This person shall also ensure that regular checks are carried out relating to the accuracy and complete transfer of the gathered data onto data carriers.

Data are processed for purposes of fulfilling the legally prescribed tasks exclusively by employees of the FTA or by qualified staff under the control of the FTA.

The FTA may compile and store data that it itself collects or consolidates or receives from persons involved in procedures, third parties or authorities electronically or in another form.¹³¹

...¹³²

The FTA is responsible for the secure operation and the maintenance of the information system and for the legality of the data processing.

The data that the FTA may process under Article 76a paragraph 3 VAT Act are as follows:

1. information about the identity of persons: in particular names, legal form, entry in the commercial registry, date of birth or date of foundation, address, place of residence and of business, telecommunication numbers, email address, place of origin, bank account, legal representative, OASI number¹³⁵;

2. information about economic activities: nature of the business activity, turnovers achieved or anticipated, date of registration or deletion, place of the provision of supplies and information about the dispatch, import and export of goods that is required for the imposition of VAT;

3. information about income and financial circumstances: in particular information from business records, operational figures, properties, cash, postal and bank accounts, securities and other moveable valuables, and undistributed inherited assets;

4. information about tax affairs: tax returns;

5. information about debts and claim assignments: period and amount of claim assignments, amount of taxable assigned claims;

6. information about debt enforcement, bankruptcy and attachment proceedings: debt enforcement, bankruptcy, composition and attachment proceedings, judicial and non-judicial acts in relation to the exercise of rights;

7. information about compliance with tax obligations: compliance with obligations to cooperate on tax matters, payment on time of taxes due, accounting obligations, findings made in the course of audits, and information required for ensuring the collection of the taxes due by tax payers and jointly and severally liable persons;

8. information about any suspicion of violations, about offences, seized goods and evidence and about criminal proceedings: justified suspicion of violations, seized goods and evidence, offences and the resulting sanctions and additional tax claims under Article 12 of the Federal Act of 22 March 1974¹³⁶ on Administrative Criminal Law;

9. information about administrative proceedings: data on administrative and tax-related judicial proceedings required for the issue of assessment notices and for the assessment of rights to tax refunds and applications for tax waivers;

10. information about administrative and mutual assistance proceedings: requesting authority, date and subject matter of the application, persons concerned, outcome of the procedure and the nature of the measures.

The FTA shall compile and maintain statistics to the extent necessary for the performance of its statutory tasks.

It may disclose data to the federal and cantonal authorities and other interested persons for statistical purposes, provided they are anonymised and permit no inferences as to the persons in question. Article 10 paragraphs 4 and 5 of the Federal Statistics Act of 9 October 1992¹³⁸ and Article 14 paragraph 3 of the National Bank Act of 3 October 2003¹³⁹ are reserved.¹⁴⁰

Non-anonymised data may be used for internal business audits and for internal business planning.

The FTA may make the VAT returns available online to the Federal Statistical Office (FSO) in order to carry out statistical surveys provided the taxable person has consented to the FSO obtaining the data from the FTA.

The FTA shall make the data under Article 134 accessible online to the persons in the FOCBS responsible for the imposition and collection of value added tax to the extent that these data are required for the correct and complete assessment of the import tax or for the conduct of criminal or administrative proceedings.

The FTA shall destroy the data at the latest after expiry of the periods laid down in Article 70 paragraphs 2 and 3 VAT Act and in Article 105 VAT Act. Excepted are data that are repeatedly required for the imposition of the VAT.

Prior to destroy the data shall be offered to the Federal Archives in accordance with the Archiving Act of 26 June 1998¹⁴⁴ for archiving.

For the evaluation of its internet service, the FTA may process data from persons who make use of this service (log files).

The data may be processed only for this analysis and only as long as necessary. After the evaluation they must be destroyed or anonymised.

A demand for comprehensive documentation is deemed to have been made if a demand for the books of account for a financial year is made with or without the related booking receipts.

The costs of the destruction of goods ordered by the FTA shall be borne by the FTA.