Acquisition tax

A tax on procurements is levied if a domestic recipient receives services from companies based abroad (Art. 1 Para. 2 No. b VAT Act).

Tax subject of the procurement tax

Recipients of services, who have a business establishment or their headquarters in the country and are liable for domestic tax, must declare and tax all service procurements. For service recipients who are not registered as taxable persons (e.g., small businesses and private individuals), the obligation to pay procurement tax applies if they procure services for more than 10,000 Fr. per calendar year.

Tax object of the procurement tax

If a foreign company imports material into Switzerland and performs work with it, an import tax is levied on the total value of the service. If the foreign company does not need material for the work, or if the domestic service recipient provides the required material, a procurement tax is generally due.

The procurement tax is owed on all services that are subject to the recipient location principle and are not exempt or relieved from tax. The recipient location principle states that the location is considered to be where the recipient has the seat of their economic activity or a business establishment. If the recipient has neither a company seat nor a business establishment, their place of residence applies. A list of services that are exempted or relieved from tax can be found under Art. 21 or 23 VAT Act. For tax-exempt services, the recipient is free to disclose and tax them. Below are some examples of services on which the procurement tax is owed:

• Services in the field of advertising and data processing
• Services provided by consultants, asset managers, fiduciaries, and lawyers
• Labor leasing
• Assignment and granting of intangible rights

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• Further information
   
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