English translation of Article 14 of the Swiss VAT Act 2010

This page contains an English translation of the below Article of the revised Swiss VATA 2010 and is part of a web based Swiss VATA 2010 commentary published in German. Should you require qualified written legal advice on cross-border transactions potentially triggering Swiss VAT  from a Swiss VAT lawyer please do not hesitate to contact: Harun Can


Article 14 of the Swiss VAT Act 2010

Commencement and termination of tax liability and exemption from tax liability 
  1. Tax liability commences with the commencement of business activity. 
  2.   
  3. Tax liability ends: 
     
    1. on cessation of business activity; 
    2. on liquidation of assets: with the conclusion of the liquidation procedure.
  4.  
  5. Exemption from tax liability ends as soon as the total of the turnovers generated in the last financial year reaches the limit under  Article 10 paragraph 2 (a) or (c) or 12 paragraph 3, or where it is foreseeable that the limit will be exceeded within 12 months of commencing or extending the business activity. 
  6.  
  7. Waiver of the exemption from tax liability may be declared from the beginning of the current tax period. 
  8.  
  9. If the qualifying turnover of the taxable person does not reach the turnover limit under Article 10 paragraph 2 (a) or (c) or 12 paragraph 3 and it is expected that the qualifying turnover will not be reached in the following tax period, the taxable person must de-register. De-registration is not possible before the end of the tax period in which the qualifying turnover is not reached. Failure to de-register is deemed to be a waiver of the exemption from tax liability under Article 11. The waiver applies from the beginning of the following tax period. 


 
Swiss VAT Ordinance
 
Article 11 of the Swiss VAT Ordinance 2010 (Commencement of tax liability and termination of the exemption from tax liability) clarifying Article 14, Section 3 of the Swiss VAT Act 2010
  1. For enterprises previously exempt from tax liability, the exemption from tax liability ends after the end of the financial year in which the relevant turnover limit was exceeded. If the business giving rise to tax liability was not carried on for the whole year then the turnover is to be prorated over the full year.
  2.  
  3. For enterprises that commence business or extend their business by taking over a business or opening a new business division, the exemption from tax liability ends with the commencement or extension of this business, if at the time based on the circumstances it is to be assumed that the relevant turnover limit will be exceeded within the following twelve months.
  4.  
  5. If at the time of the commencement or extension of business it cannot yet be assessed whether the turnover limit will be exceeded, at the latest after three months a new assessment is to be undertaken. If based on this assessment it is to be assumed that the turnover limit will be exceeded, the tax liability commences or the exemption from tax liability ends by election either retroactively at the date of commencement or extension of business or at the date of the re-assessment, but at the latest at the beginning of the fourth month.



Corresponding Article(s) of the EU VAT Directive (Recast) 2006/112/EC (as of January 2010)


 
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