The 100,000 CHF Turnover Threshold
Since more than two years all foreign companies that supply goods and services in Switzerland with turnover in excess of 100,000 francs must appoint a Swiss fiscal representative.
This rule is therefore particularly relevant especially for companies operating in their respective border regions and which do not have intent to settle with ad hoc companies in Switzerland.
The obligation is provided for both companies that exceed 100,000 francs invoiced on the territory of the Confederation, and foreign companies that exceed the same threshold, regardless of the country in which this turnover is
In the above cases the tax representative is mandatory even if there is only one Swiss franc in turnover which exceeds the aforementioned thresholds, under penalty of being prohibited from operating in Switzerland.
For this reason also small and medium-sized Italian companies that provide services in Switzerland (e.g. small construction works, development services software, manufacturing, furniture, etc.) must take care to appoint a tax representative in Switzerland.
Obligations Of The Swiss Fiscal Representative
The tax representative will take care of:
- Respect on behalf of the company all the provisions regarding VAT in Switzerland;
- Make the necessary periodic reports;
- Report the amount of VAT payments to be made to the customer;
- Carry out the necessary accounting records;
- To take care of the relationship between the company and the AFC, the Federal Tax Administration
Exemptions From The VAT Regime
It is necessary to specify that the subject to the VAT regime in Switzerland only affects those who carry out a business, therefore an independent, professional or commercial activity, in its own name and for the purpose of generate profits.
Therefore, those who, for example, limit themselves to the delivery of a product purchased by a Swiss customer in Italy or other country will not be affected by the obligation to appoint a Swiss fiscal representative or to be registered in the VAT register: in this case the Swiss customer will have to pay the Swiss VAT when the goods come imported into the Swiss territory.
However, if the Italian supplier performs a service in Switzerland, for example the installation of what has been purchased, and if the conditions relating to turnover are verified, the obligation to acquire a tax representative takes effect again and it will be the duty of the supplier to take charge of VAT and related obligations through a representative.
Tax representation can be exercised by both a natural and legal person, provided that such person has a domicile or office in Switzerland. The tax representative must be entered on the form VAT registration.
Source: Diacron Group
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