VAT: Federal Council wants to improve enforcement concerning foreign companies

Bern, 16.04.2014 - In the future, the Federal Council will require foreign companies which provide services in Switzerland temporarily to indicate their Swiss VAT number. This is to occur within the scope of the existing online declaration procedure for temporary employment in Switzerland and serves to improve verification of VAT liability. At its meeting today, the Federal Council instructed the Federal Department of Finance, together with the Federal Department of Justice and Police (FDJP), to take care of the implementation of the measure.

By improving the enforcement of VAT, the Federal Council wants to reduce the VAT-related competitive disadvantages suffered by domestic companies relative to foreign companies. Contractual services from abroad are often wrongly procured without VAT and are thereby less expensive. In the future, therefore, the Swiss VAT number must be indicated in the context of the online declaration procedure which is applicable to foreign service providers temporarily employed in Switzerland. In this way, foreign companies will be required to clarify their tax liability in Switzerland and the Federal Tax Administration can better enforce any VAT obligations they may have. The additional receipts on a yearly basis are estimated by the Federal Council to be at least CHF 10 million. The Cassis motion (12.4197) referred by parliament will be implemented with this measure. 

To further reduce the competitive disadvantages, a company's turnover achieved globally is to be applicable in terms of VAT liability instead of that achieved in Switzerland within the scope of the current partial revision of the VAT Act, It is thus clear that tax liability in Switzerland starts already the first time services are provided in Switzerland if a company generates turnover of more than CHF 100,000 globally.

Address for enquiries

Lara Merlin, Attorney-at-law, Federal Tax Administration FTA
Tel. 031 325 76 97,


The Federal Council

Federal Department of Finance