English translation of Article 28 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 28 of the Swiss VAT Act 2010

Principle 

  1. The taxable person may in the course of his business activity, subject to Articles 29 and 33, deduct the following input taxes: 
    a. the domestic tax invoiced to it; 
    b. the reverse charge declared by it(Article 45–49); 
    c. the import tax paid or payable by it which has been assessed unconditionally or has been assessed conditionally and fallen due as well as the tax declared by it for the import of goods (Article 52 and 63). 

  2. If the taxable person has, in the course of a business activity entitling it to make an input tax deduction, procured agricultural, forestry or market garden products, cattle or milk from non-taxable farmers, foresters, gardeners, cattle dealers or milk collectors, it may deduct as input tax 2.5% of the amount invoiced. 

  3. If the taxable person in the course of a business activity entitling it to make an input tax deduction has procured a used, unique, movable good for supply to a customer on Swiss territory without being charged VAT, it may make a deemed input tax deduction from the amount he has to pay. The amount paid is regarded as including the tax at the tax rate applicable at the time of acquisition. 

  4. Deduction of the input tax under paragraph 1 is permissible if the taxable person proves that it has paid the input tax. 



Article 58 of the Swiss VAT Ordinance 2010 (Input tax deduction for foreign currency) clarifying Article 28 of the Swiss VAT Act 2010

Article 45 of the Swiss VAT Ordinance 2010 applies by analogy for the calculation of the deductible input taxes.

Article 59 of the Swiss VAT Ordinance 2010 (Proof) clarifying Article 28 Section 1 a of the Swiss VAT Act 2010

1 The domestic tax is deemed to be invoiced if the supplier has demonstrably demanded payment of the VAT from the recipient of the goods and services.

2 The recipient of the goods and services does not have to investigate whether the VAT was rightly demanded. If, however, he or she knows that the person that has transferred the tax is not entered as a taxable person, the input tax deduction is excluded.

Article 62 of the Swiss VAT Ordinance 2010 (Used goods) clarifying Article 28 Section 3 of the Swiss VAT Act 2010

1 Goods in the sense of Article 28 Section 3 of the Swiss VAT Act 2010 (used goods) are understood to be used, non-fungible moveable goods, which in their present condition or after repair can be reused and whose parts are not sold separately from one another.

2 Precious metals with customs tariff numbers 7106–711210 and jewels with customs tariff numbers 7102–7105 do not constitute used goods. 

Article 63 of the Swiss VAT Ordinance 2010 (Entitlement to the deduction of deemed input taxes) clarifying Article 28 Section 3 of the Swiss VAT Act 2010

1 Provided the other requirements are met, the taxpayer can also claim a deemed input tax deduction on the purchase price of such used goods.

2 A mere temporary use of the used goods between purchase and re-delivery to a customer in Switzerland does not exclude a deemed input tax deduction. This however is subject to Article 31 (4) of the Swiss VAT Act 2010.

3 The deemed input tax deduction is excluded:

a. if upon purchase of the used goods the notification procedure under Article 38 of the Swiss VAT Act 2010 applied;
b. if the taxable person imported the used goods;
c. if goods under Article 21 Section 2 of the Swiss VAT Act 2010 are purchased, with the exception of goods under Article 21 Section 2 Subsection 24 of the Swiss VAT Act 2010;
d. if the taxable person acquired the goods in Switzerland from a person who imported the goods tax free;
e. if the amount of the payments made under the claim settlement exceeds the actual value of the goods at the time it is transferred.

4 If the taxable person delivers the good to a customer abroad, he or she must reverse the deemed input tax deduction in the reporting period in which the good was delivered.

Article 64 of the Swiss VAT Ordinance 2010 (Records) clarifying Article 28 Section 3 of the Swiss VAT Act 2010

The taxable person must keep records of the acquisition and delivery of used goods. Separate records are to be kept in the case several used goods are purchased at once for a lump-sum payment.


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

Article 168 of the EU VAT Directive

Insofar as the goods and services are used for the purposes of the taxed transactions of a taxable person, the taxable person shall be entitled, in the Member State in which he carries out these transactions, to deduct the following from the VAT which he is liable to pay:

(a) the VAT due or paid in that Member State in respect of supplies to him of goods or services, carried out or to be carried out by another taxable person;

[...]

(e) the VAT due or paid in respect of the importation of goods into that Member State.

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