Legislative changes 2023
The revised VAT law (revLTVA) will come into force on January 1, 2025. Among the changes it will bring are the introduction of an annual statement and the possibility for the FTA to waive the appointment of a fiscal representative (in the case of VAT registration of a foreign company).
Annual VAT statement
At present, VAT statements are usually submitted on a quarterly (or even half-yearly or monthly, depending on the case) basis. From January 1, 2025, it will also be possible to settle VAT annually (art. 35, para. 1bis, let. b, revLTVA). This simplification is aimed at SMEs, as it reduces the administrative burden associated with drawing up VAT statements. To qualify for the annual statement, a maximum sales limit must not be exceeded (based on figures for the previous tax period). An application must also be made to the FTA. However, the FTA reserves the right to refuse or revoke authorization for annual accounting if the conditions are not met by the taxpayer. The annual VAT statement also includes the obligation to make advance payments (art. 86a revLTVA). The amount of these instalments will be determined by the FTA (taking into account the settlement method chosen by the taxpayer) and will be based on the previous tax period. Three instalments and a final payment are required for taxpayers using the effective or flat-rate method. For taxpayers settling according to the net tax liability rate method, only one instalment is planned in addition to the final payment. Invoices will be issued for this purpose by the FTA. Whether the taxpayer opts for an annual statement has no impact on the method of assessment (effective, net tax rates or flat rates). According to the draft amendment to the VAT ordinance (p-OTVA), which is also due to come into force on January 1, 2025, the option of annual VAT settlement will only be granted if the taxable person has submitted all his statements and paid the tax on time, during the three previous tax periods (or since the start of tax liability). The FTA is also taking advantage of these changes to expand the range of services available on its portal. It is therefore envisaged that the request for an annual statement, as well as any change in the frequency of filing, will be made via the FTA portal, within 60 days of the start of the tax period in which the change is desired, respectively within 60 days of the assignment of the VAT number. The annual statement must be used for at least one full tax period (art. 35a revLTVA) before switching to the quarterly, half-yearly or monthly statement. Thereafter, the taxpayer must wait three full tax periods before switching back to an annual statement. For administrative reasons, such a change must be made at the beginning of a tax period.
Possibility of waiving the appointment of a fiscal representative.
Under current legislation (Art. 67 of the Value Added Tax Act), a foreign company with no domicile or registered office in Switzerland must appoint a tax representative in Switzerland. From January 1, 2025, however, the FTA will have the option of waiving the appointment of a tax representative in certain cases, provided that the fulfilment of the taxpayer’s procedural obligations and the prompt enforcement of the VAT Act are otherwise guaranteed (art. 67, para. 1bis, revVATL). However, the law does not specify the cases in which the FTA may waive the requirement to appoint a tax representative, or the conditions under which this may be done.
Conclusion.
The adaptations to the law and ordinance are more administrative in nature, and are designed to make things easier for taxpayers, particularly SMEs. In our opinion, however, the smooth implementation of these measures will be decisive.
