English translation of Article 29 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 29 of the Swiss VAT Act 2010
 
Exclusion of the right to input tax deduction 
  1. There is no right to make an input tax deduction on supplies and the import of goods which are used to make supplies that are exempt without deductibility of the VAT paid from the tax and where the option for their taxation has not been exercised. 

  2. Notwithstanding paragraph 1, there is a right to make an input tax deduction in the course of a business activity [see Article 9 of the Swiss VAT Ordinance] entitling the taxable person to make an input tax deduction for the purchase, holding, and sale of interests and for company restructurings as defined by Article 19 or 61 DFTA [SR 642.11].

  3. 'Interests' are holdings in the capital of other businesses held with the intent of long-term investment and conferring significant influence on the holder. A stake of 10% or more in the capital is deemed to be an interest. 

  4. In the case of holding companies, the business activity of any businesses held by them giving rise to the right to make an input tax deduction may be taken into account. 

 

 
Article 60 of the Swiss VAT Ordinance 2010 (Input tax deduction for supplies abroad) clarifying Article 29 Section 1 of the Swiss VAT Act 2010

The input tax deduction for supplies rendered abroad is possible in the same amount as if supplies had been rendered in Switzerland and the option for taxation of supplies had been exercised under Article 22 of the Swiss VAT Act 2010.


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

Article 176 of the EU VAT Directive

Restrictions on the right of deduction

The Council, acting unanimously on a proposal from the Commission, shall determine the expenditure in respect of which VAT shall not be deductible. VAT shall in no circumstances be deductible in respect of expenditure which is not strictly business expenditure, such as that on luxuries, amusements or entertainment.

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