Switzerland: Modified VAT definition with respect to electronically supplied services

Switzerland: Modified VAT definition

The Swiss federal tax administration in June 2020 announced changes in the guidelines regarding the definition of electronically supplied services for value added tax (VAT) purposes in Switzerland.


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The release finalized the Swiss approach—which now is more closely aligned with the EU VAT regulations. Under the new Swiss guidelines, a service qualifies as electronically supplied services if it meets the following conditions:

  • The service is delivered over the internet or any other electronic network;
  • The service is provided in an automated manner involving minimal human intervention by the supplier; and
  • It is impossible to ensure the provision of the service in the absence of information technology.

The new guidelines provide detailed explanations with respect to each of these three conditions as well as a list of examples of services that do (and do not) qualify as electronically supplied services.

The provision of electronically supplied services to customers (business or non-business) not registered for VAT purposes but established or a resident in Switzerland is likely to trigger a VAT registration obligation in Switzerland for the (foreign) service provider. Furthermore, once such VAT registration is in place, the “attraction principle” triggers the obligation for this foreign entity to charge and collect Swiss VAT on all its services to Swiss recipients (hence also VAT registered recipients).

The electronically supplied services changes need to be taken into account from the third quarter of 2020 (beginning from 1 July 2020). Some relief may be available (such as retroactive VAT registrations as well as a voluntary disclosure procedures).

Read a July 2020 report prepared by the KPMG member firm in Switzerland

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