Switzerland: VAT- Partial Revision Postponed For One Year, But There Are Still Changes

Last Updated: 24 April 2018
Article by Florian Hanslik and Olivia Pfister

Many changes to the VAT Law have been planned and discussed for a long time. These changes should actually have become effective on 1 January 2016. Unfortunately, for various reasons this ambitious plan could not be maintained; the partial revision has been postponed until 1 January 2017. Nonetheless, important changes come into force immediately, which from the Swiss VAT perspective ned to be taken into account:


The Federal Tax Administration (FTA) has up to now assumed basically that anyone who renders services against compensation over a longer period operates a business and therefore would be liable for VAT. A supply as defined by Art. 3 lit. c VAT Law is the concession of a usable economic asset to a third party in expectation of a consideration". As the supply should also be over a longer period, it is to be rendered inter alia systematically and repeatedly. An occasional, in particular only one-time performance of this activity would therefore not be sufficient to constitute subjective tax liability (cf. BGE 138 II 251). It is this Federal Court judgement which cites as examples the following indications for the existence of the longer-term rendering of a service: performance over several years, systematic approach, an activity geared to repetition, the generation of several turnovers, undertaking several similar actions using the same facility, the intensity of the activity, involvement in the market, maintaining a business and the manner of appearing before authorities.


If it is foreseeable that in the longer term less than 25% of the revenues will consist of revenues from supplies and services and more than 75% of donations, subventions, etc., the FTA denied a business activity. This principle was defined by the FTA in Heading 7.2 of its MWST- Info 02 "Steuerpflicht". Accordingly the FTA took the view that the longer term achievement of revenues cannot be presumed (and therefore a business activity), if it is a priori clear that with the activity in question no, or to an obviously subordinate extent, considerations for supplies and services can be earned.


It was not in dispute that in the case in question a business activity was given. Revenues were earned over the longer term. However, the FTA believed that, based on the 25/75 per cent rule it had developed, the turnovers were in the end too low to trigger the subjective tax liability, because the consideration of the appellant from supplies and services lay below 10% of the total costs. An activity geared to the long-term earning of revenues was therefore denied by the FTA.

On the other hand the appellant took the view that this administrative practice infringed the legality principle; that no basis was given in the law. The appellant therefore went to court.

Both the Federal Administrative Court in its judgment of 15 July 2014 (A-5017/2013) and also the Federal Court in its judgment dated 19.4.2015 (2C_781/2014) have ruled on this question. Both took the view that administrative ordinances (e.g. leaflets, guidelines) should serve to interpret provisions of the law. While they offer a certain freedom of design (including that such interpretations by the authorities may include schematic solution proposals) and therefore serve uniform execution of the law. It is, however, important that, despite this freedom of design that they enjoy, they may not include content that is contrary to the constitution or the law; they may not act as legislation.

In the view of the courts, however, the 25/75 per cent solution developed by the FTA does not satisfy the legal requirements. Nowhere does the VAT Law require a minimum amount of revenues earned from supplies and services measured against the total costs. Both the Federal Administrative Court and the Federal Court therefore rejected use of the 25/75 per cent rule. Further, the court states that in the present case this solution developed by the FTA leads to a result inconsistent with the facts".

Finally this very clear and precise judgment has clearly indicated the limits of the FTA: interpretations and solutions must lie within the framework of the VAT Law, to avoid undermining the legality principle. In addition, enterprises, which in the past have been struck out of the Register because of inadequate considerations, should review their entitlement to retroactive registration in order to be able to make a possible input tax claim retroactively.


What is commonplace in all EU member states has since 15 September 2015 become possible in every canton. In future the following functions are available over the electronic portal of the Swiss Federal Tax Administration (SFTA):

  • Submission of VAT returns
  • Submission of annual reconciliation
  • Submission of deadline extensions
  • Overview of transactions with outstanding and already submitted returns


Advance registration in the system of SFTA SuisseTax and the opening of an individual user account are necessary in order to be able to use the functions available. For data security reasons an authorisation by the person with power of signature is required.


Fiduciaries can of course exercise several mandates, but would have to apply only for a single user account. Corresponding powers of attorney would, however, have to be applied for over their respective user account, which, as soon as they have been signed by the persons represented, would be immediately reviewed by the FTA and approved.

We expect that the enabling of electronic submission will result in a simplification of the entire declaration process. Apart from that, the red tape can finally be reduced. This process is definitely to be welcomed and supported

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions