Switzerland Ends Security Requirement for Foreign Companies

Switzerland will no longer require non-resident VAT-registered taxpayers to provide a security deposit, according to the change to its VAT policy for foreign companies.

This security deposit, previously required in the form of a bank guarantee or cash deposit, was calculated based on a company’s estimated annual taxable turnover. It served as a guarantee for the payment of VAT liabilities. The change of approach is reflected on the updated guidance in VAT Info 22 – Foreign Companies, section 4.2 about Security.

What Has Changed for Foreign VAT Registrations?

• No new deposits: The Swiss Federal Tax Administration (SFTA) will no longer request bank guarantees or cash deposits for new VAT registrations by foreign companies.
• Reimbursements in progress: Existing cash deposits and bank guarantees are now being returned to non-resident taxpayers.
• Potential end of fiscal representative requirement: Changes to the VAT law also open the door for the SFTA to waive the obligation for foreign taxpayers to appoint a Swiss fiscal representative in the future.

Discover our overview about fiscal representation requirements in the EU countries.

Refund Process for Foreign VAT Registrations

The SFTA is reviewing all existing security deposits and issuing refunds in batches, given the high number of cases. While taxpayers cannot request faster processing, companies may choose to send a written request to the SFTA.

It should be considered that the SFTA retains the right to request new security in the future in case a taxpayer does not comply with VAT procedural obligations.

Learn more about recent VAT changes in Switzerland.