Switzerland: VAT Update: Finally, The Partial Revision Of The Vat Law Comes Into Force - What's New From 1st January 2018?

Last Updated: 25 April 2018
Article by Florian Hanslik

 Does the phrase "the heralded revolutions are not taking place" also apply to Swiss VAT? Didn't the discussion to revise VAT law begin with the simplifying notion of a uniform VAT rate? On the other hand, there were also efforts to introduce an administratively cumbersome approval procedure for the voluntary taxation of benefits (optional) and the idea to extend the limitation period from 5 to 15 years. All of these issues had to be written off by the National Council's Economic and Social Affairs Commission (WAK-N) in May 2016 to launch a partial revision that had a chance to be approved by the Council of States. Even though there may have been no revolution the rather recent VAT law, which only came into force in 2010, has now been partially revised due to these concessions.

 We would like to present the substantial changes of the revised VAT law (hereinafter referred to as "revMWSTG") in comparison to the current legal situation below. Additionally, the Swiss voting public voted for a change in VAT rates, however, these are not an integral part of the partial revision. Nevertheless, their importance is also reflected here.

The following changes are to be presented in this article:

  • Definition of closely related persons
  • Relocation of the place of delivery of consignments exempt from import tax (small consignments)
  • New calculation basis for exemption from tax liability (turnover limit CHF 100,000)
  • Simplification of the option
  • Reduced rate for electronic newspapers, magazines, and books
  • Easing the scope of the notional pre-tax deduction
  • Limiting the application of service import tax on deliveries
  • The adjustment of VAT rates

ATTENTION: The changes concerning small consignments will only enter into force on 1st January 2019.

1. Definition of closely related persons (Article 3 (h) revMWSTG)

1.1 Currently applicable law

 Closely related persons are defined as owners of significant holdings in business partnerships, meaning that foundations and associations are excluded from being closely related persons. A holding is regarded as significant if it comprises at least 10% of the share capital or 10% of the profit If equity investments reach a market value of CHF 1 million, they are also deemed to be significant.

Landing in the "closely related persons" category leads to consequences as soon as someone receives benefits from a company to which a certain connection exists. If the closely related person is employed in the company, from a VAT point of view, they will be considered as the recipient of a salary statement, i. The benefits received are to be settled via the salary statement, provided the benefits concerned are benefits provided by the employer to their employees. However, if the closely related person is not employed and receives benefits from the company, the basis of assessment of these benefits is the value agreed upon by independent third parties. An example of such a benefit would be the use of a company jet by a major shareholder for a private short trip from Zurich to Paris. The use of the jet is taxable at the same price a third party would have had to have paid.

1.2 New from 1st January 2018.

Closely related persons are defined as owners of at least 20% of the share capital as well as newly including foundations and associations, to which a particularly close economic, contractual, or personal relationship exists, meaning, the new definition of closely related persons includes foundations and associations. However, pension funds are still excluded from being regarded as closely related persons from the point of view of Swiss VAT.

1.3 Conclusion

This adjustment neutralises the one-sided preference for foundations and associations; in the future, for example, benefits will be subject to Swiss VAT, provided that an association closely linked to a company is likely to use the infrastructure of that particular company for administration and club events free of charge.

2. Relocation of the place of delivery of consignments which are exempt from import tax (Art. 7(3)(b) revMWSTG) - valid from 1st January 2019.

2.1 Currently applicable law

Consignments with a taxable value under CHF 5 are currently qualified as small consignments. These are therefore exempt from import tax. The place of delivery shall be the place where the decisive economic rights to an object are transferred or the transport or dispatch of the item begins. If for example, an object is purchased by a Swiss company in Germany, the place of delivery is in Germany, since, at the time of the purchase and dispatch, the object is to be found in Germany.

2.2 New from 1st January 2019

Fundamentally, consignments with a taxable value of less than CHF 5 continue to be exempt from import tax. In contrast to the current regulation, however, for these small consignments, the place of delivery changes from international (start of dispatch) to national (Switzerland) as soon as a distributor of these small consignments to Switzerland reaches a turnover of more than CHF 100,000 per year. In such cases, the distributor must accordingly tax the sale of these goods in Switzerland and will be subject to VAT.

2.3 Conclusion

At present, the current legislation disadvantages domestic suppliers compared to their foreign competitors. Foreign producers and suppliers could under certain conditions, provided that the turnover of CHF 100,000 is not exceeded with small consignments, prevent the offsetting of any VAT. The reform plans to counteract this preferential treatment and strengthen domestic trade.

ATTENTION: This regulation will only come into force from 1st January 2019.

To view the full article, please click here

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
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must 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