English translation of Article 3 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 3 of the Swiss VAT Act 2010

  1. Swiss territory means the territory of the Swiss Confederation together with the customs enclaves according to Article 3 paragraph 2 of the Customs Act of 18 March 2005 (CustA);
  3. Goods means movable and immovable objects and also includes electricity, gas, heating, refrigeration, and the live;
  5.  Supply means the provision of a usable economic asset to a third party in expectation of a consideration, even if it is required by law or based on an official order; 
  7. Supply of goods means:
    1. the transfer of the power to dispose of a good commercially in one’s own name, 
    2. the delivery of a good on which work has been performed, even if the good is not altered by the work, but only tested, calibrated, regulated, checked for its function or has been treated in another way,
    3. making a good available for use or profit;
  8. Supply of services means every supply that is not a supply of goods; a supply of services is also made if:  
    1. intangible assets and rights are made available, 
    2. an action is omitted or an action or a situation is tolerated; 
  10. Consideration means an asset which the recipient or, in lieu of the recipient, a third party expends in return for receipt of goods or supply of services; 
  12. Sovereign activity refers to those activities of a public authority without a business character, in particular where these are not marketable and not in competition with activities of private suppliers, even if fees, contributions or other charges are levied for them;
  14. Closely related persons means the owners of qualifying interests in a business or persons associated with them; a qualifying interest is given if the thresholds specified in Article 69 of the Federal Act of 14 December 1990 on Direct Federal Taxation (DFTA) are exceeded or if there is a corresponding interest in a non-corporate entity;
  16. Donation means a voluntary contribution with the intention of enriching the recipient without expectation of a reward in the VAT sense; a contribution also qualifies as a donation if the contribution is mentioned once or  more in a neutral manner in a publication, even if the company or the logo of the donor are used; contributions by passive members and by patrons to associations or to charitable organisations are treated as equivalent to donations;
  18. Charitable organisation means an organisation which fulfils the applicable requirements for Direct Federal Tax pursuant to Article 56 letter g DFTA;
  20.  Invoice means any document by which the consideration for a supply is settled with a third party, irrespective of how the document is described in business transactions.

Swiss VAT Ordinance

Article 1 of the Swiss VAT Ordinance 2010 (Swiss territory) specifying Article 3 (a) of the Swiss VAT Act 2010

Swiss sea-going vessels do not qualify as Swiss territory for the purposes of Article 3 (a) of the Swiss VAT Act 2010.

Article 2 of the Swiss VAT Ordinance 2010 (Pledge and special terms of sale) specifying Article 3 (d) of the Swiss VAT Act 2010

1. The sale of goods represents a delivery even if a reservation of title is registered.

2. The transfer of goods in the course of an assignment of security or as a pledge does not represent a delivery. If the right of assignment of a security or of a pledge is claimed then, a delivery takes place.

3. The sale of goods with simultaneous leaseback to the seller for use (Sale and lease back transaction) does not qualify as a delivery if at the time of the conclusion of the contract a retransfer is agreed. In this case the service of the lessor does not qualify as making goods available for use, but as a financing service under Article 21 Section 2 Subsection 19 (a) of the Swiss VAT Act 2010.

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

Article 5 of the EU VAT Directive

Territorial scope

For the purposes of applying this Directive, the following definitions shall apply:

1. ‘Communityand territory of the Communitymean the territories of the Member States as defined in point (2);
2. ‘Member Stateand territory of a Member Statemean the territory of each Member State of the Community to which the Treaty establishing the European Community is applicable, in accordance with Article 299 of that Treaty, with the exception of any territory referred to in Article 6 of this Directive;
3. ‘third territoriesmeans those territories referred to in Article 6;
4. ‘third countrymeans any State or territory to which the Treaty is not applicable.
Article 14 of the EU VAT Directive
Supply of goods
1. ‘Supply of goodsshall mean the transfer of the right to dispose of tangible property as owner.

2. In addition to the transaction referred to in paragraph 1, each of the following shall be regarded as a supply of goods:

(a) the transfer, by order made by or in the name of a public authority or in pursuance of the law, of the ownership of property against payment of compensation;

(b) the actual handing over of goods pursuant to a contract for the hire of goods for a certain period, or for the sale of goods on deferred terms, which provides that in the normal course of events ownership is to pass at the latest upon payment of the final instalment;

(c) the transfer of goods pursuant to a contract under which commission is payable on purchase or sale.

3. Member States may regard the handing over of certain works of construction as a supply of goods.

Article 24(1) of the EU VAT Directive

Supply of services

1. ‘Supply of servicesshall mean any transaction which does not constitute a supply of goods.