2018 Swiss VAT reform & new VAT registration rules for NPOs

Transcription

1 Switzerland 2018 Swiss VAT reform & new VAT registration rules for NPOs

2 Agenda VAT registration changes ?

3 2018 VAT registration changes 3

4 Swiss VAT registration Definition of taxable person Taxable person Any person, irrespective of its legal form, purpose and intention or not to generate profit, carrying out a business activity which is not exempt from tax liability. A person is carrying out a business activity when: it performs a professional or commercial activity; independently; and generates revenues on a continuing basis. Intention to generate profit is not relevant. Taxable persons can be: Private individuals; Companies established in Switzerland; Associations/charitable institutions; Public bodies; Foreign businesses supplying goods or services in Switzerland; Partnerships/joint ventures/consortiums. Swiss fixed establishment of a foreign company is considered as a separate taxable person for VAT purposes (dual entity concept). 4

5 Swiss VAT registration New threshold for exemption from tax liability VAT law in force until New VAT law in force as from Legal provision: Art. 10 VATL Practical consequences VAT registration on a mandatory basis as from CHF * of taxable turnover generated from activities in Switzerland. Taxable turnover (from a Swiss VAT perspective) for activities performed abroad is not relevant to determine the liability to register for Swiss VAT. Mandatory VAT registration in Switzerland as from CHF * of taxable turnover generated on a worldwide basis and which is not VAT exempt without credit according to the Swiss VAT law. Swiss established and foreign businesses are liable to register for VAT in Switzerland if the worldwide turnover exceeds CHF * Threshold is CHF for non-profit, voluntarily-run sporting or cultural associations and charitable organizations. Businesses established abroad are relieved from the obligation to register for VAT in Switzerland when: o o o Performing only VAT exempt without credit supplies. Supplying services taxable in Switzerland for which the customer is liable to self-assess VAT under the reverse charge mechanism (exception: IT services supplied to non taxable persons). Supplying gas and electricity from abroad to Swiss taxable persons. As from foreign businesses/npos are liable to register for VAT in Switzerland as from the first CHF of taxable turnover performed in Switzerland, if the worldwide taxable turnover exceeds the CHF / threshold. 5

6 Swiss VAT registration Relevant turnover Supplies relevant for VAT registration in Switzerland Supplies not relevant for VAT registration in Switzerland Taxable supplies of goods in Switzerland. Supplies of goods performed abroad that would be taxable if performed in Switzerland. Taxable supplies of services in Switzerland. Supplies of services abroad that would have been taxable if supplied in Switzerland. Supplies of goods in Switzerland which are VAT exempt with credit (e.g. gold coins and investment gold). Exports of goods. VAT exempt supplies which do not allow for input VAT credit in Switzerland (art. 21 Swiss VAT law). Services supplied abroad that would be VAT exempt without input VAT credit if supplied in Switzerland. Any type of income which is not provided in consideration for a supply of goods / services (e.g. donations, dividends, subsidies). 6

7 Swiss VAT registration Relevant turnover Examples of turnover relevant or not for the mandatory VAT registration threshold Type of turnover Supply of goods to individuals abroad Supply of goods to Swiss individuals Sponsoring sponsor established abroad Sponsoring sponsor established in Switzerland Entry fees for an event organized abroad (not VAT exempt according to art. 21 Swiss VAT law) Entry fees for an event organized in Switzerland Membership fees Swiss active member benefiting from specific supplies (eg. newspaper, access right, etc.) Membership fees Foreign active members Subsidy received from a public body which is not consideration for a specific supply Donation / membership fees passive member Subsidy received from private company for humanitarian project abroad Swiss VAT treatment VAT exempt with credit. Subject to Swiss VAT. Taxable at the place of establishment of the sponsor. VAT exempt with credit in Switzerland. Subject to Swiss VAT. Taxable where the event takes place. VAT exempt in Switzerland. Subject to Swiss VAT/VAT exempt without credit depending on nature of event. No option to tax. VAT exempt without credit. Option to tax. VAT exempt with credit. Out of scope of VAT. Out of scope of VAT. Taxable where the project takes place. VAT exempt in Switzerland. Relevant for VAT registration 7

8 Acquisition of services rendered by suppliers established abroad Recipient registered for VAT in Switzerland VAT must be self-assessed by the recipient under the reverse-charge mechanism. Except for services deemed to be taxable abroad (e.g. event organization, humanitarian projects). Related input VAT can be recovered depending on the input VAT recovery right of the recipient. Recipient not registered for VAT in Switzerland VAT must be self-assessed by the recipient under the reverse-charge mechanism if the amount of services acquired from suppliers established abroad exceeds CHF in one year. Except for services deemed to be taxable abroad (e.g. event organization, humanitarian project). The self-assessed VAT and any other input VAT cannot be recovered and are a final cost. How do you manage/calculate your input VAT recovery right? What about voluntary VAT registration? 8

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10 Case 1 Facts A is a joint venture between two associations established in Switzerland, relieved from the obligation to register for VAT until A generated the following types of turnover in 2017: Sales of goods or services to Swiss private individuals: CHF Sales of goods to foreign private individuals: CHF Entry fees for an event located abroad: CHF Solution According to the new Swiss VAT registration rules applicable from January 1 st 2018, the turnover relevant to assess the VAT registration obligation is CHF A is liable to register for VAT in Switzerland as from , since the VAT registration threshold has been exceeded. 10

11 Case 2 Facts B is a non-profit charitable organization established in Switzerland, relieved form the obligation to register for VAT until B generated the following types of turnover in 2017: Sales of goods or services to Swiss private individuals: CHF Funds received from Swiss Company X for a humanitarian project abroad: CHF Solution According to the new Swiss VAT registration rules applicable from January 1 st 2018, the turnover relevant to assess the VAT registration obligation is CHF The threshold for mandatory VAT registration of non-profit charitable organizations is CHF B is not liable to register for VAT in Switzerland as from

12 Case 3 Facts C is an association established in Switzerland, relieved form the obligation to register for VAT until C generated the following types of turnover in 2017: Entry fees for an event (sport competition) organized in Switzerland: CHF Subsidy received from the Canton of Vaud: CHF Membership fees from passive members: CHF Sales of goods or services to Swiss private individuals: CHF Sponsorship fees from Company Y established abroad: CHF Solution According to the new Swiss VAT registration rules applicable from January 1 st 2018, turnover relevant to assess the VAT registration obligation is CHF C is not liable to register for VAT in Switzerland as from

13 Case 4 Facts D is organisation established abroad, relieved form the obligation to register for VAT in Switzerland until D generated the following types of turnover in 2017: Supply of event organization services (organizer fees) for events located outside Switzerland: CHF Supply of event organization services (organizer fees) for events located in Switzerland: CHF Supplies of marketing services to customers located outside Switzerland: CHF Solution According to the new Swiss VAT registration rules applicable from January 1 st 2018, the turnover relevant to assess the VAT registration obligation is CHF D will be liable to register for VAT in Switzerland as from March In March 2018, company D will supply event organization services for an event located in Switzerland amounting to CHF

14 Recent developments and case law 14

15 Recent case law Definition of entrepreneurial vs non entrepreneurial scope of activity: Evolution of the administrative practice and abolition of previous rule (25% - 75%) Contributions from public bodies: When is it a subsidy and when consideration for a supply? Consequences on the input VAT recovery right: How to allocate correctly the costs? Reduction of input VAT recovery right: Requirement to reduce the input VAT deduction right proportionately to any subsidies received Assess your situation and define the potential VAT consequences and opportunities (e.g. increase of input VAT recovery right). 15

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17 Patricia More Olivier Comment Indirect tax Partner Avenue Giuseppe-Motta Genève T: Indirect tax Director Avenue C.F. Ramuz Lausanne T: Hans-Frédéric Andersen VAT Consultant Avenue Giuseppe-Motta Genève T: Konstantina Tsiosta Manager VAT Avenue Giuseppe-Motta Genève T: