English translation of Article 24 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 24 of the Swiss VAT Act 2010

Assessment basis 
  1. Subject to paragraphs 2 and 6 the tax is calculated on consideration actually received. This will include the reimbursement of all costs, even if they are invoiced separately, and public law charges payable by the taxable person.

  2. For supplies to closely related persons (Article 3 let. h), the consideration is deemed to be the amount that would be agreed between independent third parties. 

  3. For barter transactions, the market value of each supply is deemed to be the consideration for the other supply.

  4. For replacement repairs, consideration refers only to value of the labour for the work carried out. 

  5. For supplies made in lieu of payment, the consideration is deemed to be the amount which is thereby satisfied.

  6. Not included in the assessment basis are:
    1. ticket taxes, immovable property transfer taxes and the VAT itself payable on the supply;
    2. amounts that the taxable person receives from the person receiving the supply as reimbursement of outlays made in his name and for his account, provided they are detailed separately (transitory items)
    3. the portion of the consideration that, on sale of an immovable good, relates to the value of the land;
    4. the cantonal contributions to water, sewage or waste funds included in the price of disposal and supply services, to the extent that these contributions are used by these funds to pay contributions to disposal plants or waterworks.


Article 45 of the Swiss VAT Ordinance 2010 (Considerations in foreign currency) clarifying Article 24 Section 1 of the Swiss VAT Act 2010

  1. For purposes of calculating the VAT payable, considerations paid in foreign currency are to be converted into national currency at the date the tax claim arises.

  2. A consideration is deemed to be in a foreign currency if the invoice or the receipt is issued in a foreign currency. If no invoice or receipt is issued then the book entry of the supplier is applicable. It is irrelevant whether the payment is in national or foreign currency and in which currency the change is paid.

  3. The taxable person can elect to rely on the monthly average rate published by the Federal Tax Authorities or the daily exchange rate (selling) for the conversion. For foreign currencies for which the Federal Tax Authority does not publish a monthly average rate the daily exchange rate (selling) always applies.

  4. Taxable persons or entities that are members of a group may use the internal group conversion rate for their conversion.

Article 46 of the Swiss VAT Ordinance 2010 (Credit card commissions and cheque charges) clarifying Article 24 Section 1 of the Swiss VAT Act 2010

In particular, credit card commissions, cheque charges, WIR rebates, etc. do not constitute consideration reductions.


Article 47 of the Swiss VAT Ordinance 2010 (Goods and services to employees) clarifying Article 24 of the Swiss VAT Act 2010
  1. In the case of goods and services rendered to employees for consideration, the tax is to be calculated on the consideration actually received. Article 24 Sections 2 and 3 of the Swiss VAT Act 2010 are reserved.

  2. Goods and services rendered by the employer to employees that must be declared in the salary certificate are deemed to be rendered for consideration. The tax is to be calculated on the amount that is also applicable for direct taxes.

  3. Goods and services that do not have to be declared in the salary certificate are not rendered for consideration and a business reason is assumed to exist.

  4. To the extent that lump sums are permissible for determining the wage elements applicable for direct tax purposes and assessing the VAT, such lump sums may also be used for VAT purposes. 

  5. For application of Sections 2–4 it is irrelevant whether the persons concerned are closely related persons as stipulated under Article 3 (h) of the Swiss VAT Act 2010. 

Article 48 of the Swiss VAT Ordinance 2010 (Cantonal contributions to water, sewage or waste funds) clarifying Article 24 Section 6 (d) of the Swiss VAT Act 2010
  1. For every fund, the Federal Tax Authority establishes the percantage amount of the deduction for the individual affiliated waste disposal organizations and waterworks.

  2. It takes into consideration that:
    1. the fund does not pay out all the contributions received; and
    2. the taxable customers of waste disposal services and water supplies have deducted the tax thereon invoiced to them in full as input tax. 

 


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

 
Article 72 - 79 of the EU VAT Directive
Taxable amount

Importation of goods

Article 72
For the purpose of this Directive ‘open market value’ shall mean the full amount that, in order to obtain the goods or services in question at that time, a customer at the same marketing stage at which the supply of goods or services takes place, would have to pay, under conditions of fair competition, to a supplier at arm's length within the territory of the Member State in which the supply is subject to tax. Where no comparable supply of goods or services can be ascertained, ‘open market value’ shall mean the following:

(1) in respect of goods, an amount that is not less than the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time of supply;

(2) in respect of services, an amount that is not less than the full cost to the taxable person of providing the service.


Supply of goods or services

 
Article 73
 
In respect of the supply of goods or services, other than as referred to in Articles 74 to 77, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.
 
Article 74
 
Where a taxable person applies or disposes of goods forming part of his business assets, or where goods are retained by a taxable person, or by his successors, when his taxable economic activity ceases, as referred to in Articles 16 and 18, the taxable amount shall be the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time when the application, disposal or retention takes place.
 
Article 75
 
In respect of the supply of services, as referred to in Article 26, where goods forming part of the assets of a business are used for private purposes or services are carried out free of charge, the taxable amount shall be the full cost to the taxable person of providing the services.
 
Article 76
 
In respect of the supply of goods consisting in transfer to another Member State, the taxable amount shall be the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time the transfer takes place.
 
Article 77
 
In respect of the supply by a taxable person of a service for the purposes of his business, as referred to in Article 27, the taxable amount shall be the open market value of the service supplied.
 
Article 78
 
The taxable amount shall include the following factors:
(a) taxes, duties, levies and charges, excluding the VAT itself;
(b) incidental expenses, such as commission, packing, transport and insurance costs, charged by the supplier to the customer.
For the purposes of point (b) of the first paragraph, Member States may regard expenses covered by a separate agreement as incidental expenses.
 
Article 79
 
The taxable amount shall not include the following factors:
(a) price reductions by way of discount for early payment;
(b) price discounts and rebates granted to the customer and obtained by him at the time of the supply;
(c) amounts received by a taxable person from the customer, as repayment of expenditure incurred in the name and on behalf of the customer, and entered in his books in a suspense account.
The taxable person must furnish proof of the actual amount of the expenditure referred to in point (c) of the first paragraph and may not deduct any VAT which may have been charged.
 
 
 
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