- The Federal Court has ruled on the deductibility of input tax in relation to consultancy services in the context of the sale of investments.
- A taxable person in Switzerland can only claim input tax if the services were provided during a period in which the person was already registered for VAT.
- The burden of proof lies with the taxable person to demonstrate when the services were actually provided.
- The Swiss Federal Tax Administration (ESTV) denied the input tax deduction, arguing that only services provided after the registration date could be deducted.
- The ESTV assumed a proportional allocation of fees based on the duration of the contracts, as detailed information on the timing of the services was lacking.
- The Federal Court agreed with the ESTV’s position that input tax deduction is only allowed for services provided during the period of tax liability.
- The court focused on the burden of proof for the timing of the services, placing the responsibility on the taxable person to provide evidence.
- The A AG, the taxpayer in this case, had entered into consultancy contracts before registering for VAT, and the services were invoiced after registration.
- The court concluded that the input tax deduction could only be allowed for services provided after the registration date.
Source: primetax.ch
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
