VAT: Differences Switzerland-EU

In the area of VAT, there are some differences between Switzerland and the EU. As the EU operates under a different legal system, compatibility between the systems is not always given.

VAT: Differences must be considered!

There are some differences between Switzerland and the EU in terms of value-added tax. For instance, in the EU, supplies and services are defined differently than in Switzerland. This is evident, for example, in a service like office cleaning. From a Swiss perspective, office cleaning is considered a supply, while from the EU perspective, it is classified as a miscellaneous service. Another difference is the tax status of the service recipient. In Swiss VAT law, it is irrelevant whether the service recipient is liable for tax or not. However, in the EU, this is important as it influences the location of the service. If it is a B2B service, the recipient's location principle applies, while for a B2C service, the location (headquarters) of the service provider is generally decisive.

Important for Swiss companies

When dealing with foreign sales, any potential registration obligation must always be checked (item 221 CH VAT settlement). When agreeing on a common contractual formula such as Incoterms, it should be noted that the Incoterm DDP (Delivered Duty Paid) may trigger the supplier's tax liability in the respective state. Additionally, there is the option of not disclosing the CH VAT number to an EU entrepreneur. The identification number often leads to confusion. It is also advisable to agree on a clause in the general terms and conditions stating that costs for taxes and customs duties can still be charged subsequently. Work deliveries are subject to the reverse-charge procedure in most EU countries. In the case of cross-border services, an EORI number should be obtained (customs identification as a company). If not registered, there are several risks that must be considered. For example, in the area of indirect taxes, there is full legal and administrative assistance and penalties are threatened for tax evasion, tax fraud, or excise fraud.