Switzerland: Partial Revision of the VAT Act adopted by Parliament

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The Swiss Federal Department of Finance announced that during its meeting on 2 June 2017, it decided that the partial revision of the Value Added Tax Act adopted by the Parliament will come into force on 1st January 2018.

Under the new regime, to become VAT liable, worldwide turnover ought to be considered rather than recently Swiss turnover. Consequently, organizations whose worldwide turnover is no less than 100,000 CHF will be obligated to VAT from the principal franc of turnover in Switzerland. Previously, foreign companies could provide their services in Switzerland without VAT up to a turnover level of CHF 100,000.

The Federal Council will delay the execution of the reconsidered framework until January 1, 2019, for mail-arrange organizations, on the grounds that Swiss Posts needs more opportunity to actualize the specialized arrangements of the new law.

Accordance with this regime, the clients will no longer need to pay the taxes and fees imposed by customs upon importation, however it will be an obligation of the mail-order companies to bill clients for VAT if the mail-order annual turnover from small consignments is at least CHF 100,000.

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