VAT‘s Important Foreign Or Domestic Place Of Supply – Pros And Cons?


For supplies of goods from abroad into Switzerland, the place of supply is not always deemed to be abroad. On the one hand, there are voluntary options through which the place of supply changes to the Swiss territory - with the consequence that Swiss VAT must be charged. On the other hand, however, this could also be the obligatory consequence for companies. We would like to point out the individual cases in this newsletter.

Import License

In terms of supplies of goods from abroad into Switzerland (imports), the place of supply from a VAT point of view is basically abroad, i.e. the recipient receives an invoice without VAT. In this case, the recipient in Switzerland must be stated as the importer of record on the customs declaration. The latter is liable for import VAT and can - provided that the conditions are met - claim this import VAT as input VAT in the VAT return.

This procedure is, most notably, not always advantageous for distance selling businesses. On the one hand, the total costs are not apparent to the customer when placing the order, as the import VAT and possible customs duties are invoiced separately and he / she must pay these amounts directly to the courier or postman. On the other hand, the selling company must create a customs declaration for each individual recipient in Switzerland.

A solution to these problem areas is offered by the so-called "Import License" (Form No. 1236). Through an approved Import License, the supplier is permitted to import goods in his / her own name, i.e. acting as the importer of record and paying the import VAT. Conversely, the supply (i.e. the sale to the Swiss customer) is considered as being domestically provided and is therefore also subject to Swiss VAT with the result that the customer receives an invoice with Swiss VAT in such cases. The approved license leads to a tax liability for the supplier; he / she therefore basically has the right to deduct the input VAT with respect to the paid import VAT. The Import License removes the disadvantages mentioned above: Since the supplier pays the import VAT, he / she can offer the total costs (including VAT) to the customer and there are no (unforeseen) additional costs for the customer. Moreover, combined consignments from abroad are possible (i.e. no separate customs declarations per Swiss recipient).

The service provider, who is in possession of an approved Import License, has the option of waiving the import in its own name in individual...

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