1. VAT in Europe
3. VAT in Switzerland
5. Reverse Charge in Switzerland

Reverse Charge in Switzerland

Reverse Charge for Non-Established Companies in Switzerland

Switzerland has introduced reverse charge on certain supplies:

• Supplies of services performed by a non-established and not VAT registered Supplier that are taxable in Switzerland. The only exceptions are the telecommunication and electronic services B2C, which are subject to Swiss VAT if the Supplier exceeds the CHF 100,000 threshold.
• The import of data storage media without market value with the services and rights included therein.
• Supplies in connection with immovable property located in Swiss territory made by non-established and not VAT-registered Suppliers.
• Supplies of electricity and gas via the distribution networks, and district heating by businesses established abroad. The place of supply is determined by where the recipient of these supplies is established or, in the absence of such establishment, where they are consumed.

Important remarks concerning the reverse charge mechanism in Switzerland:

• Foreign suppliers VAT-registered in Switzerland must charge VAT on all supplies located in the country. Reverse charge may only apply in the above scenarios provided that the foreign supplier is not VAT registered in Switzerland.
• In Switzerland, there is no distinction between B2B and B2C supplies. So reverse charge may apply regardless of whether the supply is B2B or B2C if the rest of the conditions are met. Exceptions are telecommunication and electronic services B2C, as well as the supply of electricity, gas, and district heating.

• Supplier requirements
  Non-established and not VAT-registered foreign Supplier.
• Customer requirements
  A taxable person VAT registered in the country, or

  Any Swiss recipient if the value of purchases under RC exceeds CHF 100,000 (even non-taxable persons)

• Scope
  Supplies of services that are taxable in Switzerland.

  Import of data storage media without market value with the services and rights included therein.

  Supplies in connection with immovable property located in Switzerland.

• Supplier requirements
  Non-established and not VAT-registered foreign Supplier.
• Customer requirements
  A taxable person VAT registered in the country.
• Scope
  Supplies of electricity and gas via the distribution networks, and district heating.

This is regulated under Art. 45 Swiss VAT Act.

Reverse Charge on Specific Goods and Services in Switzerland

Reverse charge is never applied if the supplier is a resident person.