The case

The VAT Ordinance is going to be updated and specified in additional areas, including, among other things, a fundamental revision of the net tax and flat tax rate methods. The aim is to determine VAT liability more exactly and to simplify accounting/declaration methods, which will benefit small and medium-sized enterprises, in particular when having to account/declare for VAT. In addition to said amendments and as a measure to combat fraud, the reporting procedure for cash payments of CHF 15,000 or more for taxable services between taxable persons is to be compulsorily applied. The draft also provides for the use of an electronic portal for VAT declarations to become mandatory for registrations and notifications for net tax and flat tax rate taxation, annual declaration as well as group taxation, all of which are voluntary.

The new VAT Ordinance is planned to enter into force on 1 January 2025, which is also the target date for the required extensive IT adjustments.

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Source: FTA

The commentary

The proposal aims at improving efficiency and simplifying processes, which should benefit especially smaller companies. Seen from today’s perspective, individual sectors are not going to be particularly affected by the revision.

Article 38 will remain important for the trust industry as it defines who is considered to be the sponsor of a foundation or an establishment. The decisive factor is not who finances the foundation or establishment, but rather who has the power to determine its bodies.

Paragraph 3 includes an adjustment of the scope of the tax exemption required because foundations and establishments do not only provide exempt services to or receive exempt services from the communities concerned when they are their sole founders, but also when they are the sole sponsors.

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