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Switzerland

Holistic overview VAT regulatory changes as of 2025

5 months ago
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6 min read

Annual VAT reporting

Starting from January 1, 2025, companies registered for VAT in Switzerland will have the option to choose annual VAT reporting. This change offers greater flexibility and efficiency for businesses, particularly small and medium-sized enterprises (SMEs). To qualify for annual reporting, companies must meet two key conditions:

  1. Annual Taxable Turnover Threshold: The annual taxable turnover should not exceed CHF 5,005,000.
  2. Compliance History: The taxpayer must have a clean compliance record, having filed VAT returns and paid all tax liabilities fully and on time in the last three tax periods. If eligible, businesses opting for annual VAT reporting will be required to make advance payments or VAT installments to the tax authority, calculated based on previous reporting periods. This change aims to streamline reporting and reduce administrative burden for eligible companies.

Customs

Starting from January 1, 2025, Switzerland is implementing a new goods traffic system called Passar. Here are the key changes related to Passar:

  • Passar 1.0 (June 2023): The digital processing of transit and export of goods will transition from the existing freight applications NCTS and e-dec Export to Passar 1.0.
  • Passar 2.0 (January 2025): The import process will move from e-dec Import to Passar 2.0. This transition will occur in parallel for six months, with the old e-dec Import system being deactivated by July 1, 2025

 

E-Commerce

Starting from January 1, 2025, Switzerland will implement significant changes related to VAT on e-commerce activities. Here are the key points:

  1. Deemed Supplier Concept: Electronic platforms that facilitate supplies of goods (connecting sellers and buyers) will be considered as “deemed suppliers.” This means they’ll be responsible for VAT on all supplies of goods to buyers unless specific conditions are met.
  2. Information Obligation: All electronic platforms may be requested by the Swiss Federal Tax Administration (SFTA) to provide information about sellers. This change aims to enhance transparency and compliance in e-commerce supply chains.

Previously, mail-order sellers were considered the suppliers of goods, but the new rules shift the responsibility to electronic platforms

E-filing of VAT returns

Starting from January 1, 2025, all VAT-registered companies in Switzerland must file their returns online using the ePortal. If your company currently submits VAT returns on paper, you can continue to do so until December 31, 2024, by completing a paper billing order form for each billing period. This move toward mandatory electronic filing aims to streamline processes and enhance efficiency.

Emissions trading

  • Trading emissions rights and certificates will be subject to VAT, including transactions with foreign sellers.
  • Sellers of emissions rights must adjust their systems and stop showing VAT on invoices from 2025.
  • Buyers of emissions rights must account for VAT from 2025.

Exemption

  • Certain services will be exempted from VAT, including coordinated care services related to curative treatments, travel (re-)sold by travel agencies, fees for participation in cultural events, and products and services provided among institutions founded by public bodies

Fiscal representation

Switzerland will allow foreign VAT registered businesses to avoid appointing a fiscal representative under certain conditions by January 2025. Currently, foreign taxable persons without a presence in Switzerland must appoint a fiscal representative for VAT purposes.

Joint Liability

Introduction of a joint liability for managing directors and the possibility for the SFTA to request security from managing directors with indications of previous bankruptcy, with outstanding VAT payable being offset against the security if debt collection against the company fails.

Place of supply

Starting from January 1, 2025, the place of supply VAT rules in Switzerland will undergo changes for certain cross-border supplies. Here are the key modifications:

  1. Travel Agency Services: The place of supply for travel agency services will shift to where the agent is resident. Foreign travel agents will no longer need Swiss VAT registration for locally organized trips or services.
  2. Sports, Culture, Entertainment Events: The exception to the general rule will be modified. VAT will apply in Switzerland only if these services are “provided directly to persons physically present on site”

VAT Rate

From January 1, 2025, menstrual products so far taxed at the normal VAT will now be taxable at the reduced VAT rate 2.6%.

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