WEBVTT

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...

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A sunny Friday, thank you so much for coming to the CCIG.

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I can see that there's still some discussion here and there, and you'll have time for that later.

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Thank you very much for settling in.

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It's a pleasure to welcome you to the CCIG, the chamber of commerce you know so well.

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For those who don't know yet, because you've been living in a cave for the past few months,

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The CCIG is a very dynamic and young chamber, celebrating its 660th anniversary.

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We have a team of 30 employees at your service.

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We're delighted to be working with the State of Geneva and other Geneva-based institutions.

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to promote entrepreneurship, the business world and innovation.

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In a few words, very quickly, the CCIG really has three pillars on which it rests.

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The first is really, we're a political lobby.

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So we support, finance and co-finance political campaigns, often with other associations,

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and help you, in your day-to-day business management, to welcome, support and develop favorable framework conditions.

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This is a very important pillar. The second pillar is a platform. We are a club of entrepreneurs, a platform on which we

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act with a certain number of events, maybe 120 a year.

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Events ranging from the very small to the very large, including the Grand Prix de l'économie, one of the highlights of the fall season.

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We also join forces with the State to promote the Geneva economy, innovation, international influence and industry.

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So this is a really important appointment for you too.

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And then there's the international trade component, which is what sets the Chamber apart from other institutions.

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And here we organize events that are highly targeted to a particular sector, country, group of countries or continent.

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We also organize and host delegations abroad.

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So these are economic delegations.

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This is another important pillar of the Chamber.

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So that's all there is to it.

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We're here to help you.

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In any case, you're in for a very rewarding workshop.

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We're happy to have been working alongside the government for decades.

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Ça continue.

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So I'd like to take this opportunity to hand over to Kustrim, who will explain a little about the ins and outs of this day.

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Welcome to all of you and have a good day again.

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Thank you Elsa. On behalf of the Office cantonal de l'économie et de l'innovation, I would like to join Elsa in

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welcoming you to this breakfast for SMEs and startups.

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We're back in this format here in this beautiful Maison de l'économie. I think it's also time for a happy 160th anniversary.

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It's true that we're delighted with this collaboration, not just in the context of these conferences, but more broadly with the Chamber of Commerce,

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which also enables us, alongside them and with our own resources, to set up tools for your companies,

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the right framework conditions for companies and entrepreneurs to really develop in Geneva,

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for the prosperity and sustainability of our canton.

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So today's topic, a rather technical one, value-added tax, as you may know, is one of the Confederation's main sources of revenue.

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So from an administrative point of view, it's a subject that's taken very seriously.

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But we'll see that you need to take it very seriously on your side too, because at first glance, value-added tax looks pretty straightforward,

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but they're still based on a fairly complex system that undergoes a fair amount of revision and adaptation.

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I think these are good things too,

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because these adaptations inevitably mean a lot of extra work for you as a company,

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are also capturing certain economic trends and different ways of consuming.

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From the point of view of framework conditions and the competitiveness of Switzerland as a business location, it's

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true that VAT also has an essential role to play.

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Now, it's true that this complexity can grow even greater when we venture into international transactions, whether importing or exporting.

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We'll see today. But now, for you as a company, it's true that this VAT also plays an important role, because you're the one who collects it.

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So good management is essential to avoid unpleasant financial surprises.

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And that's the aim of this morning's conference, to give you the tools and important information you need in the changing context of VAT.

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to help you prepare for the best possible VAT management.

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So I'd like to thank today's speakers for their words and for sharing their expertise.

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It's obviously a lot of work to prepare, and you'll obviously have a question-and-answer session afterwards to go into a

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little more depth on certain points of their presentation.

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I'd also like to thank the historical partners of the SME and startup breakfasts. Their names appear on the screen.

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And Mr. Frédéric Thomasset, who will moderate the Q&A session and introduce the morning's speakers.

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I hope you enjoy the conference. We look forward to seeing you at the next breakfast, this time at l'Affaire Genève. It's on June 27, on

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the theme of pension planning for SMEs. I hope you enjoy the conference, and I'll now hand over to Frédéric.

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Thank you very much. I'm sorry, but I asked for the lectern. It's a bit like an election rally, but it reinforces your stature.

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Good morning everyone, and welcome to this breakfast for SMEs and start-ups.

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Frédéric Thomasset, I'm editor-in-chief of Bilan magazine. We'll fix it next time, we'll get it right.

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It's a joke. Hence the lectern, we needed it for stature.

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So, for the balance sheet magazine, I just wanted to make it clear that being at the heart of the concerns and lives of

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entrepreneurs is extremely important to us.

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That's what we like to tell, that's what we're trying to tell. In fact, at the end of this month, we're bringing out our

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annual issue on young entrepreneurs under 40.

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If you don't have a taste in the room, it may not be too late to apply. We're interested in all entrepreneurs.

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But the important thing for us is to be at the heart of these concerns, and of course being here with you today enables us to reaffirm this commitment.

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I also wanted to tell you that today, as specified, we're going to be looking at VAT issues and the implications for businesses.

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through three experts specializing in these issues, with the ultimate aim of leaving you better armed, at least I hope so.

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Today, we're going to develop this theme through three presentations.

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The first will be on how to manage VAT on import-export by Naomi Savioz, Tax Manager at Deloitte.

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This will be followed by a presentation on the practical challenges of advance tax deduction by Olivier Comment, Director of Tax and Legal Services at PwC.

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Finally, Claire Hubacher, BDO's VAT Director, presents the net tax debt rate method and the new flat-rate method.

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I'd like to invite Naomi Savioz to join me here. We're going to go over the basics of VAT with her.

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Ms Savioz holds a law degree from the University of Geneva.

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She has also set up a company, a start-up in sustainable, solar energy.

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So it also includes, I imagine, your issues and considerations.

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The floor is yours.

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Ah, sorry, just a clarification, I'm sorry.

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I completely forgot, we're going to have a Q&A session at the end.

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I'm sorry, my apologies no voilà so much for me so through

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the slido tool you can already scan how it is to think about your

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you don't have to wait until the end of the session to ask questions.

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the meeting and then I will moderate at the end these questions we will come back to.

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so don't hesitate to start the process now - thank you for the delay.

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so thank you very much Frédéric for the introduction so my name is Naomi Savioz I work at

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Deloitte and today I'm going to tell you about international vat, so in particular

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focused on how to manage vat on import and export before what I'm going to show you

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I'm going to say a few words today before getting to the heart of the matter.

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general information on vat in switzerland so basic concepts vat is a tax which is

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levied on the activity or its proceeds, so it's a transactional tax as opposed to an income tax.

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like income tax or profit tax, vat is a so-called indirect tax, because in fact

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In fact, it's a cost for consumers, but they won't be paying VAT directly to the authorities.

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It's other economic players like you, i.e. companies, that will collect the VAT and pay it to the authorities.

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It's a neutral tax.

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This means that for you, the companies collecting the VAT, in principle, it's not a cost.

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It's really only a cost for the consumer.

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In particular, you will be able to deduct the VAT you have paid on your purchases.

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Finally, VAT is a federal tax.

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It is therefore governed by federal VAT law.

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The Federal VAT Ordinance is supplemented by guidelines published by the Federal Tax Administration,

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which is in fact the competent authority for VAT.

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So, to sum up VAT a little, what is subject to VAT? All services provided for consideration on Swiss territory for which

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the law does not provide any exclusion or exemption.

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I'd also like to talk about Swiss territory. As I said, services are provided on Swiss territory, which is the territory of the Confederation,

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but it also includes all foreign enclaves within the meaning of the Customs Act, in particular the Principality of Liechtenstein.

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That's the main enclave we're thinking about. And two more words on the questions we ask ourselves in VAT when we provide services.

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We want to determine whether the service should be subject to Swiss VAT. The reasoning is to follow the five questions I've put on the slide.

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So, I'm going to go through them briefly so that we know a little more precisely what we're talking about.

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So, firstly, the service must be provided by a taxable person.

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So, it's a person who runs a business in Switzerland with the aim of making a profit on a sustainable basis.

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In other words, a permanent activity.

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For example, a private individual selling his car doesn't qualify as a business.

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So these people won't be charging VAT on their services.

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A company that sells goods to make a profit, yes.

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Then the second question is, is there a supply of goods or services?

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In other words, is there an exchange of services?

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For a service to be taxable, there must be an exchange of services.

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In particular, the consideration is also important because it will form the basis for calculating VAT.

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VAT is a percentage that is applied to the consideration.

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Secondly, as I said, VAT only applies to services provided on Swiss territory.

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For Swiss VAT to apply, it must still be determined that the service actually takes place in Switzerland and not abroad.

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There are a number of different rules governing the location of the service, depending on whether it is a supply of goods or a provision of services.

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I'll go into a little more detail later on the supply of goods, but there are also different rules that apply to the provision of services.

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Then, once we've determined that the service does indeed take place in Switzerland, we look in the law to see if there

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are any exclusions or exemptions that apply.

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By law, certain services are excluded from VAT by their very nature, such as medical treatment or insurance services.

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The law contains an exhaustive list of excluded benefits.

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This means we won't be charging Swiss VAT on them.

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Some services are also exempt under certain circumstances. Some services, for example, are provided on Swiss territory in accordance with the rules,

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but which are consumed abroad. Export is a typical case of exemption. I'll come back to this a little later in the presentation.

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In these cases, you will not charge Swiss VAT on your service.

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Lastly, who is liable for VAT? In principle, as we've seen, it's the supplier, but the law also provides for cases where, in fact,

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it's the recipient of the service who will have to collect and pay VAT at the same time.

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It's called acquisition tax. You may already have heard of it. So, the recipient of the service will have to, as we say,

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self-liquidate the VAT through his VAT statement.

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And then there's the import tax, which I'll also talk about in a little more detail later.

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So that's VAT too, but it's levied when the goods are imported into Switzerland.

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And finally, I'll just finish my little introduction by reminding you about VAT rates.

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So there are three rates applicable in Switzerland.

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the standard rate, currently 8.1%, and the reduced rate of 2.6%, which applies to certain goods,

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including foodstuffs and certain medicines.

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Here too, there is a list in the law.

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And the special rate of 3.8% on accommodation services.

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I'd also like to point out that VAT rates may increase next year.

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from 2026, to finance the 13th AHV pension.

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This is not yet certain, as the increase is subject to a popular referendum.

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which hasn't yet taken place, but we'll be keeping an eye on it next year.

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Now let's get down to the nitty-gritty of cross-border deliveries of goods.

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First, let's define the terms.

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As I said earlier, for the purposes of localization rules, it's very important to know whether we're dealing with the

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supply of goods or the provision of services.

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Goods are defined in the law, in article 3 of the LTVA.

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These are movable or immovable items, but they can also be things that are not tangible,

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like electricity, gas, heat, cold and so on. These are goods.

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So what is a delivery of goods?

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It's very important to define this too.

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There are three activities that qualify as the supply of goods.

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Firstly, the fact of granting a person the power to economically dispose of an asset in his or her own name.

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It's all very technical. Basically, it's about sales and property transfers.

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This is the most obvious case.

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This is also known as delivery of goods.

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When you hand over a recipient, a property on which work has been carried out.

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Under Swiss law, work on goods is also considered to be the supply of goods.

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I insist because it's not the same definition they have, for example, in the European Union.

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Repairs or cleaning, any work on an asset, even the adjustment of assets.

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In fact, in Switzerland, it's considered a delivery of goods,

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specific location rule, once again.

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Whereas in the European Union, they tend to consider it as a service.

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So be careful, if you have European counterparties, it may not always be obvious.

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And the third case of delivery of goods is when a good is made available to a third party for use or enjoyment.

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Therefore, any allocation of goods will be considered as a delivery of goods.

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And today, I'm going to concentrate on cross-border deliveries of goods, i.e. import-export.

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cross-border, involving several countries, i.e. goods moving from Switzerland to other countries

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or inversion, from abroad into Switzerland.

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The location of the service is really what determines whether or not you will have to charge Swiss VAT.

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on your performance or not.

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The general rule for deliveries of goods,

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in principle, the place where the goods are located

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when the power to dispose of it is transferred,

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when delivered to the recipient in the case of work on goods,

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or when it is made available to third parties during rental.

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So we're really going to look at where the property is physically located.

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at the time of transfer, sale or lease,

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to determine where the delivery of goods is located.

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And it gets a little more complicated, quotation marks, when there's transport involved,

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when I sell a property from Switzerland to another country,

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or when selling goods from abroad to Switzerland,

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there, in this case, if the good is transported,

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to determine the place of supply, we look at where transport or shipment to the buyer begins.

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So if a good is imported into Switzerland, the sale of a good imported into Switzerland will be located abroad,

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since transport begins abroad. In this case, Swiss VAT will not apply.

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There are some special cases, and I'm going to mention one in particular here, the others I'll mention a little later in my presentation.

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The supply of electricity, gas and heat, these types of goods are intangible and difficult to locate, so there is a special rule for them.

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The place of supply is in fact the place of destination.

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We're no longer going to look at where the good is physically located, since it's difficult to locate, but rather where my recipient is.

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If I supply electricity to a counterparty in Switzerland, my service will be located in Switzerland, and therefore potentially subject to Swiss VAT.

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So I'm going to start by talking about exporting goods from Switzerland.

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What's so special about this? Export is when supplier A, in my example, sells goods to buyer B, and sends the goods to the buyer, who is abroad.

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So the applicable rule, as I said, is that this delivery will be deemed to be located in Switzerland, since transport begins in Switzerland.

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Now, the special feature is that exports are tax-exempt if certain conditions are met.

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This means that, even if they are, in theory, taxable in Switzerland, we can apply a 0% VAT rate, i.e. not apply VAT.

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There are three possible exemptions.

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So the export must be direct, i.e. the good must be directly exported abroad.

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What is direct export?

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This is when goods are transported abroad without being used on Swiss territory.

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So that's really how we define a direct export.

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There is also export, which can be exempted if, for example, in the case of a lease, the property is in fact leased in

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Switzerland, but is used predominantly abroad.

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So I'm renting a car in Switzerland, but I'll be using it mainly abroad. In this case, your lessor will be able to exempt his service.

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So you won't have to pay Swiss VAT on them. And finally, there's also the case of sending your own goods abroad,

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without there really being an underlying supply.

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So here, for example, I have a distribution warehouse abroad, and I'm going to transport my own goods to sell them abroad, in this warehouse.

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I'll be able to exempt my export, so no VAT will apply.

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The formal condition, which in fact applies to all exemptions, is that you have to be able to prove it.

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The Federal Tax Administration, when it sees, during an audit for example, when it sees in your statements that you have performed exempt services,

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it may ask you for proof. Here, in the case of export, you will have to prove that you have exported, that there has been a

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direct export of your goods, for example, to a foreign country.

00:23:33.620 --> 00:23:41.260
In the case of a rental, you will need to prove that the property has in fact been used predominantly abroad in order to apply the exemption.

00:23:41.260 --> 00:23:51.620
If not, of course you'll have to charge Swiss VAT on your service, given that the service is located on Swiss territory, as we've seen.

00:23:52.560 --> 00:24:06.780
Examples of documents used to prove export are customs documents, i.e. the export tax ruling issued by the Federal Customs Office.

00:24:06.780 --> 00:24:15.196
That's an example, really; it's the best way to prove your export. After that, in Switzerland, we have this

00:24:15.119 --> 00:24:18.903
principle of freedom of appreciation of evidence.

00:24:19.260 --> 00:24:27.605
If, for whatever reason, you don't have the export document, you can always prove your export by means of other documents,

00:24:27.538 --> 00:24:31.913
such as contracts or invoices that mention a foreign destination.

00:24:31.980 --> 00:24:43.440
But after that, the ACS is free to assess the evidence. It is also free to say that it is not sufficient. After that, you have to argue.

00:24:47.180 --> 00:24:58.227
I'd also like to say a few words about chain operations. It may be that the good, which is in fact an export of goods, is a movement, a

00:24:58.146 --> 00:25:04.919
single movement of goods, but several deliveries of the same good are underlying it.

00:25:07.140 --> 00:25:12.720
In this case, all deliveries are eligible for exemption.

00:25:12.720 --> 00:25:18.420
So we'll consider that the first delivery, in my diagram here, first delivery, second delivery, third delivery,

00:25:18.420 --> 00:25:22.660
all of which could be exempted, could be considered as an export.

00:25:22.660 --> 00:25:26.540
But, once again, you have to be able to prove it.

00:25:26.540 --> 00:25:29.040
So each supplier of the service will have to prove it.

00:25:29.040 --> 00:25:32.580
So if you're in the middle of the chain, you don't necessarily have the export documents,

00:25:33.060 --> 00:25:39.740
you'll need to request them from the supplier who will handle the export formalities.

00:25:39.740 --> 00:25:49.240
So that's it for exports, and the counterpart to exports, the import of goods into Switzerland.

00:25:49.240 --> 00:25:58.120
The import of goods into Switzerland is subject to, as I said at the beginning of my introduction,

00:25:58.280 --> 00:26:09.380
are subject to import tax, because in this case, as we said, the good enters Switzerland,

00:26:09.380 --> 00:26:18.360
so the starting point is abroad, which means that this type of sale from a foreign supplier to a buyer in Switzerland,

00:26:18.360 --> 00:26:25.620
it's taxable abroad, but when the good is imported, when it crosses the border,

00:26:26.640 --> 00:26:32.580
Switzerland will still tax this shipment with its import tax.

00:26:32.580 --> 00:26:38.260
In this case, it's the Federal Customs Office,

00:26:38.260 --> 00:26:42.300
which is under the Federal Customs Administration,

00:26:42.300 --> 00:26:45.840
which will collect VAT instead of the Federal Tax Administration.

00:26:45.840 --> 00:26:52.080
So it's the importer who has to pay the import tax.

00:26:52.080 --> 00:26:54.400
So in VAT, in fact, there are going to be rules.

00:26:54.760 --> 00:27:01.500
And it's the VAT that dictates who will be an importer, to define who will pay the import VAT.

00:27:01.500 --> 00:27:15.440
In principle, if there is a supply of goods underlying the import, it is the final recipient of the supply who is liable for import tax.

00:27:17.340 --> 00:27:23.480
So if, for example, you order a good from a foreign supplier that is going to cross the border,

00:27:23.480 --> 00:27:29.640
in principle, you, as the buyer, will have to pay the import tax.

00:27:29.640 --> 00:27:34.340
We'll see that there are exceptions, special cases,

00:27:34.340 --> 00:27:39.760
where it's the supplier who pays the import VAT, I'll come to that.

00:27:39.760 --> 00:27:44.200
And then, if there are no deliveries that are the basis for the import,

00:27:44.300 --> 00:27:50.420
you import your own goods, for example, it is the person who can economically dispose of the good,

00:27:50.420 --> 00:27:57.480
who can use it, who can consume it immediately after import, who will be liable for import tax.

00:27:57.480 --> 00:28:07.580
When importing, what should be considered as the basis for calculation?

00:28:07.580 --> 00:28:11.600
What is the purpose of the import tax?

00:28:11.600 --> 00:28:14.820
In the case of a sale, it's quite simple.

00:28:14.820 --> 00:28:20.620
It is the consideration agreed between the parties that serves as the basis for calculating the tax.

00:28:20.620 --> 00:28:28.620
If it is another operation or there is no sale that leads to importation,

00:28:28.620 --> 00:28:36.560
it is the market value that will be used as the basis for calculating the tax on imports.

00:28:39.240 --> 00:28:49.640
Taxes, customs duties and any other taxes due must be added to the consideration or market value, if not already included,

00:28:49.640 --> 00:28:55.720
and also transport costs related to the shipment of the good.

00:28:55.720 --> 00:29:06.220
All this must be included in the consideration or market value or added to determine the basis for calculating tax at the time of import.

00:29:08.240 --> 00:29:17.560
And finally, the services and rights that are included in the good, typically a data medium with software on it.

00:29:17.560 --> 00:29:28.540
It's not just the value of the data carrier that will be taxed on import, but the total consideration including the value of the software.

00:29:31.800 --> 00:29:44.960
I'll now turn to the specific case of imports. The principle is that in the case of an import, once again, the service takes place abroad.

00:29:44.960 --> 00:29:57.260
So, if I sell imported goods, I won't apply Swiss VAT, in principle. But there are cases where the place of supply is in Switzerland,

00:29:57.260 --> 00:30:00.600
which means that the delivery is still taxable in Switzerland.

00:30:00.600 --> 00:30:05.140
I'm going to present three exceptions, three cases like this.

00:30:05.140 --> 00:30:08.960
In chain transactions, as we have seen, chain transactions,

00:30:08.960 --> 00:30:13.480
several suppliers for the same shipment of goods.

00:30:13.480 --> 00:30:21.460
If one of the suppliers in the chain has a so-called declaration of commitment,

00:30:22.640 --> 00:30:30.160
Here we are. What is a declaration of commitment? It's an authorization that the supplier requests from the FCA,

00:30:30.160 --> 00:30:38.000
therefore the Federal Tax Administration, in order to import the goods in its own name, in place of the recipient, the buyer.

00:30:38.000 --> 00:30:49.360
In this case, in fact, his service, so it's he who will act as importer already, who will pay the import tax instead of the purchaser.

00:30:49.860 --> 00:30:55.000
And on top of that, his service will be deemed to have been provided on Swiss territory.

00:30:55.000 --> 00:31:00.120
So, let's say that, in my example, B is the second supplier,

00:31:00.120 --> 00:31:03.560
he has this declaration of commitment.

00:31:03.560 --> 00:31:10.260
In fact, its delivery, i.e. delivery of BAC, will be deemed to have taken place on Swiss territory.

00:31:10.260 --> 00:31:11.480
and no longer abroad.

00:31:12.640 --> 00:31:22.440
From deliveries B to C onwards, all deliveries take place in Switzerland and are therefore subject to Swiss VAT.

00:31:22.440 --> 00:31:27.060
B will have to charge Swiss VAT on its services to C.

00:31:27.060 --> 00:31:32.140
C, the same thing, will have to charge Swiss VAT on its supply to D.

00:31:32.140 --> 00:31:39.560
Everything before that, however, remains taxable abroad, or at least not in Switzerland.

00:31:41.600 --> 00:31:48.140
So that's the first special case. Another special case is delivery on the basis of a work contract.

00:31:48.140 --> 00:31:55.283
What is a contract for work and services in Swiss VAT? It's not just a supply of goods, but a supply of goods followed by the

00:31:55.227 --> 00:31:59.164
installation of the good, installation, assembly, working on the good.

00:31:59.220 --> 00:32:11.300
In this case, we're talking about a cross-border business contract. In other words, an asset that comes from abroad, but is installed in Switzerland.

00:32:11.600 --> 00:32:20.814
So, in this case, we would tend to say the good comes from abroad, so once again not subject to Swiss VAT, the supply not subject to Swiss VAT,

00:32:20.751 --> 00:32:28.377
but the fact that the good is worked on in Switzerland, in fact, once again attracts the place of supply to Switzerland.

00:32:28.640 --> 00:32:32.680
the supplier will have to charge Swiss VAT on all its services.

00:32:32.680 --> 00:32:40.440
And the importer will be the supplier of the service.

00:32:40.440 --> 00:32:45.960
So he'll have to charge Swiss VAT on all his services.

00:32:45.960 --> 00:32:52.580
One last little case I wanted to present to you: mail-order sales.

00:32:52.580 --> 00:32:58.580
A company that provides mail-order services,

00:32:58.640 --> 00:33:07.640
and has annual sales of at least 100,000 francs from small consignments transported or dispatched from abroad.

00:33:07.640 --> 00:33:14.340
Deliveries to him will therefore be deemed to have been made on Swiss territory.

00:33:14.340 --> 00:33:20.660
What is a small or low-value shipment?

00:33:20.660 --> 00:33:30.020
These are supplies of goods for which the import VAT to be calculated is less than 5 francs.

00:33:30.020 --> 00:33:38.880
So, in short, goods worth less than 62 francs with a tax calculated at 8.1%.

00:33:38.880 --> 00:33:51.860
So these are companies that do a lot of sales from abroad to Switzerland, small shipments, e-commerce companies,

00:33:51.860 --> 00:33:57.740
from the moment they exceed 100,000 francs in sales from these small consignments,

00:33:57.740 --> 00:34:04.700
all their deliveries from abroad will be subject to Swiss VAT, and will be deemed to have been supplied on Swiss territory.

00:34:04.700 --> 00:34:12.900
So, in this case, the purchaser, the consumer in Switzerland, will not have to pay import tax.

00:34:12.900 --> 00:34:16.680
However, Swiss VAT will apply to the purchase.

00:34:16.680 --> 00:34:26.440
This concludes my presentation on importing and exporting.

00:34:26.440 --> 00:34:34.440
Let me conclude by saying that import VAT is not a cost in principle for businesses.

00:34:34.700 --> 00:34:37.620
In principle, it is deductible as input tax.

00:34:37.620 --> 00:34:43.320
And I'll take this opportunity to make the transition to the next presentation.

00:34:43.320 --> 00:34:46.620
who will go into a little more detail on this subject.

00:34:46.620 --> 00:34:49.120
Thank you very much for your attention.

00:34:49.120 --> 00:34:57.180
I imagine you'll have many questions,

00:34:57.180 --> 00:34:59.080
perhaps some of the clarifications you've just asked for.

00:34:59.080 --> 00:35:02.220
Once again, the questionnaire is open,

00:35:02.220 --> 00:35:04.400
so don't hesitate to take the plunge.

00:35:04.700 --> 00:35:12.949
I'd now like to invite Olivier Comment to join me. Mr. Comand has been with PwC for over 20 years. He is a director in the tax

00:35:12.884 --> 00:35:16.815
department, with a team of 10 people dedicated to VAT remand.

00:35:16.880 --> 00:35:24.391
Prior to that, he worked at the Federal Tax Administration, VAT Main Division in Berne. You can find him on LinkedIn, I imagine,

00:35:24.333 --> 00:35:28.782
like many of you, but also on Strava because he also talks a lot about sport.

00:35:30.100 --> 00:35:45.704
Thank you Frédéric for the introduction. Hello everyone. Let's get straight to the heart of the matter. You may or may not be

00:35:45.704 --> 00:35:55.822
registered for VAT. You're wondering whether or not you're entitled to reclaim VAT.

00:35:56.040 --> 00:36:07.263
Can you reclaim all or part of this VAT? That's what we're talking about today. To pick up on what Naomi mentioned in her basic

00:36:07.176 --> 00:36:15.093
introduction, obviously, if you're a taxpayer, you'll have to pay VAT to the Confederation.

00:36:15.180 --> 00:36:22.840
So if you're importing, as Noémie said earlier, when you stop at customs and the customs officer asks you to pay VAT when you enter Switzerland,

00:36:22.840 --> 00:36:27.140
so it's the Confederation's number one source of tax, the number one source of VAT.

00:36:27.140 --> 00:36:33.180
The second is the acquisition of services from abroad. We talked about this very briefly too.

00:36:33.180 --> 00:36:40.620
If you work with foreign consultants, you here in Switzerland will have to collect this VAT. It's a little-known fact.

00:36:40.620 --> 00:36:43.120
So if you have any questions about this, please don't hesitate to contact us.

00:36:44.260 --> 00:36:53.660
And then, of course, if you're going to sell activities or services in Switzerland, you'll have to pay VAT on them too.

00:36:53.660 --> 00:36:57.500
So that, I'd say, is the primary basis.

00:36:57.500 --> 00:37:07.231
Afterwards, if you pay VAT to the authorities, this also means that the authorities will authorize you to reclaim the VAT

00:37:07.152 --> 00:37:11.661
you incur on your various purchases of goods or services.

00:37:12.020 --> 00:37:20.120
Here, to simplify the calculation, I've deliberately used a rate of 8%,

00:37:20.120 --> 00:37:22.460
but as Noémie said, we have 8.1% today.

00:37:22.460 --> 00:37:28.860
You have producer A, who will sell a service or a product,

00:37:28.860 --> 00:37:35.400
which will invoice its service at 54 francs, i.e. 50 plus 4 VAT.

00:37:35.400 --> 00:37:38.980
And then the one in the middle gets this bill.

00:37:39.560 --> 00:37:44.120
And the question he has to ask himself is: "Can I reclaim this VAT or not?

00:37:44.120 --> 00:37:47.280
So the first question is: "Am I liable for VAT or not?

00:37:47.280 --> 00:37:50.100
Because to be able to reclaim it, you have to be registered for VAT.

00:37:50.100 --> 00:37:52.700
So that's the first condition.

00:37:52.700 --> 00:37:56.300
And then him, of course, as he continues on his way.

00:37:56.300 --> 00:37:58.620
and will reuse its goods or services,

00:37:58.620 --> 00:38:03.720
that it will add value and charge for the second transaction that follows,

00:38:03.720 --> 00:38:07.600
the principle applies again, he puts in his margin, he'll bill 100,

00:38:07.720 --> 00:38:09.860
he'll put the VAT on it at 8, and we'll have 108.

00:38:09.860 --> 00:38:12.960
And the idea, in the general concept,

00:38:12.960 --> 00:38:16.820
Naomi mentioned earlier that we have a tax that is in principle neutral,

00:38:16.820 --> 00:38:21.220
is to say that everyone will pay Berndt what he has to pay on his bill,

00:38:21.220 --> 00:38:23.440
the 4 francs in the first example,

00:38:23.440 --> 00:38:25.640
and the 8 francs in the second example,

00:38:25.640 --> 00:38:32.900
and everyone who has registered for VAT will reclaim the VAT invoiced to them,

00:38:32.900 --> 00:38:36.820
so that for the middle one, all 4 are neutral,

00:38:37.360 --> 00:38:41.500
Because he'll be billed 4, but he'll get 4 back in his VAT statement.

00:38:41.500 --> 00:38:44.300
And then, the next, he bills the 8.

00:38:44.300 --> 00:38:50.220
And then there's the end customer - you and me, for example, when you pick up your carton of milk at Migros.

00:38:50.220 --> 00:38:53.020
You'll pay VAT on this carton of milk and get nothing back.

00:38:53.020 --> 00:38:56.820
You're the last link, you're not registered for VAT.

00:38:56.820 --> 00:39:01.560
All you have to do is bear the final VAT at the end of the chain.

00:39:02.060 --> 00:39:09.400
But in the middle, all that happens, the general concept of VAT, is that everyone will pay what they have to pay and everyone will

00:39:09.344 --> 00:39:14.404
recover what they have been invoiced in the context of the commercial activities generated.

00:39:14.460 --> 00:39:23.840
That's why we say that, in principle, VAT is neutral, as long as there are VAT taxpayers in the chain who are able to reclaim the VAT.

00:39:27.800 --> 00:39:39.320
I understand that my VAT on my carton of milk is lost, but is there any way of recovering it?

00:39:39.320 --> 00:39:49.399
So obviously you have to have a business, that's the first thing, to be able to consider a recovery, you have to be subject to VAT,

00:39:49.324 --> 00:39:56.145
again, to be subject to VAT we'll see now after the conditions, whether or not you can be.

00:39:56.880 --> 00:40:04.240
We have to use an effective method. Claire will shortly be talking about the flat-rate method. You'll also have the

00:40:04.177 --> 00:40:08.517
counterpart or simplified method, should you find it too complicated.

00:40:08.580 --> 00:40:16.860
You'll get the information later from Claire. You'll need a receipt. So, when we're in a business relationship, you'll receive the invoice, etc.

00:40:16.860 --> 00:40:26.446
So that's not something that's going to cause any problems. You have to pay the VAT. Having an invoice is one thing. But if you

00:40:26.372 --> 00:40:32.986
haven't paid VAT to your supplier, the authorities won't agree to you reclaiming the VAT.

00:40:34.000 --> 00:40:43.414
So that's another condition. Then, of course, you can't reclaim VAT on operations that aren't subject to VAT. I'll come back to this point later.

00:40:43.287 --> 00:40:52.129
Let me digress for a moment. Start-ups can be subject to VAT, of course, because they're planning business activities, even if they involve

00:40:52.129 --> 00:41:00.653
research and development that takes a certain amount of time. But the activity may, the company or the start-up may be subject to VAT.

00:41:01.220 --> 00:41:08.775
Now, where the authorities are starting to turn off the taps a little, is that in an ideal world of business activity,

00:41:08.712 --> 00:41:12.237
when you receive your invoice, you will reclaim the VAT.

00:41:12.300 --> 00:41:20.560
Because, on principle, you're going to pay your supplier anyway, and the authorities don't really care what you've paid.

00:41:20.560 --> 00:41:27.600
She'll check when you have a VAT audit, but in practice, you receive your invoice, you collect, you pay, and then the chain goes like this.

00:41:27.840 --> 00:41:35.026
For startups, it's a little different because they apply for VAT registration, not to pay VAT, because since they're in startup mode, they

00:41:34.975 --> 00:41:40.929
don't pay VAT because no business has yet been generated, but they apply for registration to be able to reclaim VAT.

00:41:41.800 --> 00:41:50.091
As a result, for some time, the authorities only act as a bank, in the sense that startups receive invoices. They say to

00:41:50.023 --> 00:41:54.372
themselves, "I've got to get this VAT back from the authorities.

00:41:54.440 --> 00:42:03.336
So they're not taxable, they do the VAT statement. VAT paid 0, VAT recovered 2000. It takes a while. Then, the administration

00:42:03.266 --> 00:42:08.310
closes the tap and asks startups for proof of payment of their invoices.

00:42:08.780 --> 00:42:15.380
And often these startups, when they're in a financing round or don't necessarily have very high levels of financing,

00:42:15.324 --> 00:42:18.064
try to finance themselves by reclaiming this VAT.

00:42:18.120 --> 00:42:24.055
So they say to themselves "we can get this VAT back, Berne, it'll make us some cash". And then Bern turns off the tap, saying

00:42:24.008 --> 00:42:27.793
"fine, you want to reclaim this VAT, that's fine, just show us proof of payment".

00:42:27.840 --> 00:42:35.480
In fact, it's not paid. So the administration blocks the reimbursement, saying "try as long as you haven't paid, we won't reimburse you".

00:42:35.480 --> 00:42:41.440
So it's a bit like the administration's game in relation to start-ups.

00:42:41.440 --> 00:42:48.040
To be a taxpayer, you have to do business.

00:42:48.040 --> 00:42:54.680
Earlier we heard Naomi say that if you have your collector's roofs, you sell them once a year,

00:42:54.680 --> 00:43:01.480
and it's worth 150,000 francs, you won't be liable for VAT because you've sold your roofs once a year for 150,000 francs.

00:43:01.480 --> 00:43:08.905
So you need business continuity. There has to be an objective to carry out commercial activities. That's why a start-up can be subject

00:43:08.851 --> 00:43:14.366
to tax, because there's a concept of activity and business behind it, even if it takes a little time.

00:43:14.420 --> 00:43:24.553
Over 100,000 francs. That remains the basis. If you're under 100,000 francs, you can voluntarily ask to be registered

00:43:24.468 --> 00:43:28.555
for VAT. That's another option available to you.

00:43:30.140 --> 00:43:35.960
The character of independence, the company, you, the individual who must generate its activities from a VAT point of view.

00:43:35.960 --> 00:43:39.720
If there are two of you, it may be a simple company.

00:43:39.720 --> 00:43:45.000
And if you have a SA or SARL, it will be the SA or SARL that has to apply for its VAT number.

00:43:45.000 --> 00:43:56.660
Now, where do you deduct VAT or on what can you deduct VAT?

00:43:56.660 --> 00:44:05.860
Of course, the Swiss part, everything you'll be billed for, everything your partners and suppliers will bill you for... that's the Swiss part.

00:44:05.860 --> 00:44:12.920
as part of your commercial activity, the auditor who invoices you for his audit, buys bottles and cartons from you,

00:44:12.920 --> 00:44:19.320
you'll receive invoices, and you'll reclaim the VAT on these invoices,

00:44:19.320 --> 00:44:23.280
on these merchandise purchases. Provided, of course, that there is VAT on the invoice, once again.

00:44:23.920 --> 00:44:25.480
This is obviously a condition.

00:44:25.480 --> 00:44:30.400
The second is the little-known acquisition tax.

00:44:30.400 --> 00:44:37.460
It's when you work with foreign consultants who charge you 100 foreign VAT, of course,

00:44:37.460 --> 00:44:40.300
because it's abroad, so it won't charge you VAT.

00:44:40.300 --> 00:44:47.400
And the person liable for this VAT is you, here in Switzerland, who must pay and report this VAT to the authorities.

00:44:47.400 --> 00:44:53.280
Perhaps some of you are thinking "I don't quite understand the concept".

00:44:53.280 --> 00:45:00.620
I'll be quick. If I, SSC, send you an invoice here in Switzerland, I'm going to charge you, if we go back to the table earlier, I'm going to charge you 100 plus 8.

00:45:00.620 --> 00:45:08.920
Do you agree? If you now ask PVC France to send you the same invoice, you'll receive an invoice from PVC France for 100 francs.

00:45:08.920 --> 00:45:13.500
So if we stop there, we'd be inclined to say that we work with all foreign providers, and they're 8 francs cheaper.

00:45:13.500 --> 00:45:19.749
And then the authorities said, for these invoices, when you work with these consultants, we're not going to ask the

00:45:19.695 --> 00:45:23.006
French entity to register for VAT in Switzerland to pay the 8.

00:45:23.280 --> 00:45:33.346
The person receiving the bill here in Switzerland will be asked to pay 8. First of all, he has to declare 8 to pay. And if he's

00:45:33.268 --> 00:45:39.822
registered for VAT and can reclaim the VAT, these 8 will be automatically reclaimed.

00:45:40.260 --> 00:45:48.781
In the end, it's all the same. You end up with zero. But there's a mechanism where we, if you'll pardon the expression, shift the

00:45:48.652 --> 00:45:57.624
responsibility here in Switzerland to the purchaser of the service, the recipient of the service, to have to announce in his VAT statement,

00:45:57.624 --> 00:46:05.951
I've received invoices from foreign consultants for an amount of time, I have to pay the time VAT, but I can reclaim it directly.

00:46:07.600 --> 00:46:14.873
That's zero. I'll come back to this in a moment. And then the last point, the import tax, where again it's the example of earlier with Naomi, you

00:46:14.775 --> 00:46:21.999
have the lorry that stops at customs, the customs officer who tells you that you have to pay 1500 francs VAT on the basis of your lorry, he's going

00:46:21.999 --> 00:46:28.142
to give you the import acquittance that you're going to pay, and then you're going to recover this VAT in your VAT statement.

00:46:28.680 --> 00:46:34.794
The proof is the VAT import receipt, where you have the amount of VAT that has been invoiced to you. It's the same as if you had a supplier in

00:46:34.751 --> 00:46:41.077
Switzerland. The only difference is that here, the supplier is the customs supplier to whom you have paid VAT, and you are going to reclaim this VAT.

00:46:44.600 --> 00:46:59.140
So, I take the... I'd like to pick up on Naomi's presentation. When you export, when the goods leave Switzerland to go to France,

00:46:59.029 --> 00:47:07.909
we saw earlier that there was no Swiss VAT, because the goods leave Switzerland.

00:47:08.180 --> 00:47:16.062
On the other hand, you'll have to pay French, Spanish or Italian VAT, because it will be charged in the country of destination. Now,

00:47:15.945 --> 00:47:23.476
when goods arrive in Switzerland from France, Italy or Spain, the same application will be "shifted", i.e. the French, Italian or

00:47:23.476 --> 00:47:28.263
Spanish will not charge you local VAT because the goods are leaving their country.

00:47:28.760 --> 00:47:36.138
And then, when the goods arrive in Switzerland, someone has to pay the VAT. And when you have goods, you always have to deal with customs, again and

00:47:35.993 --> 00:47:43.032
again. So the customs officer, now there are simplified procedures, but to put it simply, you've got the customs officer who's going to stop you,

00:47:43.032 --> 00:47:50.362
who's going to tell you what it is, how much it costs, what's the value, wait, you've got to pay the VAT, you pay the VAT, then you're going to recover

00:47:50.362 --> 00:47:57.255
the VAT in your VAT statement, in the same way as you recover the VAT on the PVC invoice, on your croissant, on your liter of milk, etc., etc.

00:47:57.880 --> 00:48:04.356
Insofar as you're still subject to VAT, registered for VAT, etc., it's the same situation in both cases. So it's the same

00:48:04.304 --> 00:48:08.148
situation in both cases, simply one time exporting or one time importing.

00:48:09.320 --> 00:48:21.768
Obviously, all this applies, once again, to the extent of the business activities carried out by the self-employed person or company, as

00:48:21.678 --> 00:48:31.510
opposed to so-called private activities, which are not commercial in nature and therefore not subject to VAT.

00:48:31.720 --> 00:48:38.515
And anything that's private doesn't allow you to reclaim VAT or anything else. Because if it's private, you're not going to pay VAT or

00:48:38.465 --> 00:48:44.310
anything else to the authorities. You won't be able to reclaim anything related to your so-called private activities.

00:48:52.040 --> 00:48:59.722
Now, you might say to me, yes, but can I recover all the VAT a little, a lot, passionately? Because we're going to see now that there are subtleties to

00:48:59.672 --> 00:49:06.350
this, that overall, the vast majority of taxable persons recover VAT in full, but we're going to see that this isn't always the case.

00:49:06.400 --> 00:49:21.868
The second parenthesis concerns holding companies, which, from a business point of view, have no commercial activity, because as a

00:49:21.751 --> 00:49:32.883
general rule they only hold equity interests, i.e. they own shares in companies here and there,

00:49:33.200 --> 00:49:40.752
So they don't generate any entrepreneurial or business activity to speak of. A few years ago, the authorities introduced a

00:49:40.691 --> 00:49:46.599
derogation to allow holding companies to be subject to VAT in Switzerland and to reclaim the VAT.

00:49:46.660 --> 00:49:55.420
You could tell me that this isn't normal because they don't pay anything to the administration, but they have the right to recover. So I'd say yes,

00:49:55.304 --> 00:50:03.189
we need to talk to the politicians, because they're the ones who decided this. The idea, of course, was to attract holding companies to

00:50:03.189 --> 00:50:11.424
Switzerland, which at the time enabled them to reclaim VAT, as opposed to the more European rules where holding companies cannot reclaim VAT.

00:50:11.760 --> 00:50:18.571
So there may well have been some political decisions behind this to bring certain so-called holding companies to

00:50:18.511 --> 00:50:21.140
Switzerland to generate business, and so on.

00:50:21.200 --> 00:50:28.560
Let me reopen a third quick parenthesis. The French administration is currently working on a draft publication on

00:50:28.496 --> 00:50:31.056
the rules specific to holding companies.

00:50:31.120 --> 00:50:36.660
Don't dive in, it's a publishing project. It's still pretty indigestible.

00:50:38.160 --> 00:50:40.820
Or it used to be quite simple, tomorrow it'll be a bit more complicated.

00:50:40.820 --> 00:50:44.924
And for the record, even within the administration, they don't even necessarily know how, they don't even

00:50:44.886 --> 00:50:46.842
necessarily understand what's written in the thing.

00:50:46.880 --> 00:50:54.220
So even for us specialists, it's complicated, so if it's also complicated within the administration, we'll see what comes out of all this.

00:50:54.220 --> 00:51:04.180
I'll come, I'll jump, I'll come back later.

00:51:07.760 --> 00:51:18.691
Now, keep one thing in mind. If you want to reclaim VAT, you have to pay it to the authorities. I often use this concept of give and take. You

00:51:18.615 --> 00:51:27.724
give VAT to Berne, respectively you pay VAT to Berne. Berne will give you the right to reclaim it in your VAT statement.

00:51:30.300 --> 00:51:41.394
When you have sales subject to VAT, the first yellow box, if you only do these operations, you will systematically pay VAT to

00:51:41.307 --> 00:51:47.073
Berne, and Berne will give you the right to reclaim the input tax.

00:51:47.160 --> 00:51:53.940
So I do 100% VAT, I pay 100% VAT in Bern, I'll get 100% back on the other side.

00:51:55.440 --> 00:52:04.860
If you now have activities that are excluded - and we're getting into the exclusions - school, doctor, physiotherapist,

00:52:04.782 --> 00:52:11.322
banking activities, activities that are excluded from VAT, we won't pay VAT on them.

00:52:11.400 --> 00:52:18.900
The authorities will tell you that you don't pay VAT to the authorities on this part, so you're not entitled to reclaim VAT.

00:52:21.060 --> 00:52:30.666
And now, if you say to yourself, you also have exempt activities. Exempt activities, like the example Naomi mentioned earlier,

00:52:30.591 --> 00:52:37.045
are exports, where exports are at 0%, because they were exported from Swiss territory.

00:52:37.380 --> 00:52:43.265
And the authorities say you can reclaim the VAT on this one too. So you don't pay anything to us. Now, you might say to me, "Olivier, that's not

00:52:43.225 --> 00:52:47.700
quite right what you're saying, because you're saying that to reclaim, you have to pay in Bern". And it's true.

00:52:49.280 --> 00:53:00.145
Exports mean you pay zero. Why do you pay at zero? Because in the export scheme, if you want to open the transaction, it's

00:53:00.057 --> 00:53:05.752
like saying that the transaction is subject to VAT until customs.

00:53:05.840 --> 00:53:12.790
And when you arrive at customs, there's the customs export document. At that point, you should be credited with VAT,

00:53:12.731 --> 00:53:16.441
because we have proof that the goods have left Swiss territory.

00:53:16.500 --> 00:53:23.998
In practice, we don't do it that way. As soon as the goods are scheduled for export, you'll issue an invoice without VAT. But

00:53:23.939 --> 00:53:28.721
that's why you need proof of export to show that the goods have left the country.

00:53:28.780 --> 00:53:36.636
If you have an inspection and you don't have proof of export, the inspector will correct it. To simplify this scheme, the

00:53:36.572 --> 00:53:40.596
authorities have said that you can reclaim VAT on export sales.

00:53:41.200 --> 00:53:47.840
So now we see that there are activities that allow you to recover everything, and activities that allow you to recover little or nothing at all.

00:53:47.840 --> 00:53:57.980
Now that you've got all this, the three yellow boxes, it means that at some point you're going to have to ask yourself the question,

00:53:57.980 --> 00:54:08.260
when you buy merchandise or when you receive your invoices, my invoice that I received, the purchase of merchandise that I made,

00:54:08.260 --> 00:54:11.440
What company does it go to?

00:54:11.440 --> 00:54:14.700
Does it go to the box where I can reclaim the VAT?

00:54:14.700 --> 00:54:18.520
Does it go to the box where I'm not entitled to reclaim VAT?

00:54:18.520 --> 00:54:22.440
Or does it go for the box, which we call in mixed jargon,

00:54:22.440 --> 00:54:26.600
because the charge you had, the computer license,

00:54:26.600 --> 00:54:28.180
the Swisscom bill,

00:54:28.180 --> 00:54:32.400
you've used it a little bit for one box, but a little bit for the other box too,

00:54:32.400 --> 00:54:36.420
and you're going to have to ask yourself about these expenses,

00:54:37.060 --> 00:54:42.000
Since it's for both boxes, how can I recover? Do I get back 100 or 0?

00:54:42.000 --> 00:54:50.360
As it's a little bit for one, then a little bit for the other, you're going to have to find a key that will allow you to say I can recover 50%, 60%, 40%.

00:54:50.360 --> 00:54:53.680
And the key, one of the keys often used, is sales figures.

00:54:53.680 --> 00:54:59.640
You're going to say so many sales submitted, so many sales not submitted, that makes me 50-50 or 60-40.

00:55:00.020 --> 00:55:08.400
So on expenses that are used on one side and on the other, I'll only get back 50%, 40%, 70% or 25%.

00:55:08.400 --> 00:55:12.960
You can't just say, "I'm putting everything in a box.

00:55:12.960 --> 00:55:18.460
You can, but only if you have an inspection and the inspector sees that you have what are called mixed activities,

00:55:18.460 --> 00:55:27.200
he'll want to reallocate by box what you should have actually recovered if you'd done the right thing.

00:55:29.740 --> 00:55:34.981
So, that's still to the extent that you're involved in so-called commercial activities, the three yellow boxes,

00:55:34.935 --> 00:55:37.254
exports, sales in Switzerland, service, and so on.

00:55:37.300 --> 00:55:45.200
Then, alongside this, you have operations that are not part of the service account.

00:55:45.200 --> 00:55:51.800
So you're not getting paid or selling something in return for something.

00:55:51.800 --> 00:55:57.020
There is no exchange of services between you and the third party.

00:55:57.020 --> 00:55:58.400
I'll come back to this point later.

00:55:59.080 --> 00:56:03.000
Then you have products that are not taxable, here from a VAT point of view.

00:56:03.000 --> 00:56:04.020
I'll go back.

00:56:04.020 --> 00:56:12.720
As I was saying, when you have a mixed product, it's the first box.

00:56:12.720 --> 00:56:14.680
Correction for double assignment.

00:56:14.680 --> 00:56:19.680
You have loads assigned for one box and for the other box.

00:56:19.680 --> 00:56:22.100
And when you have that, you have this key.

00:56:22.100 --> 00:56:24.920
You need to determine a key to know how much you can recover.

00:56:24.920 --> 00:56:27.440
This is the notion of double assignment.

00:56:28.520 --> 00:56:39.000
When we talk about exclusion, we're talking about operations that are not subject to VAT, so you can't reclaim VAT on these operations.

00:56:39.000 --> 00:56:43.380
This is the second yellow box.

00:56:43.380 --> 00:56:55.060
And now, the third box here, which I haven't mentioned yet, it's barbaric, is the reduction of the advance tax deduction.

00:56:55.200 --> 00:57:03.522
So it's as if you were to say, I'll count the 50 plus the 4 francs first, I'll count 4 francs first, but these 4 francs I'll

00:57:03.456 --> 00:57:06.494
have to correct, I'll have to reduce 4 francs.

00:57:06.560 --> 00:57:17.462
I won't get 4 francs back, it might be 2 francs 50 or 3. And this happens or applies when, one, you receive subsidies, from the

00:57:17.377 --> 00:57:23.715
Confederation, a canton or a public authority, because they're helping you.

00:57:24.600 --> 00:57:32.199
You don't pay VAT on the subsidy because there's no exchange of services. When the canton, municipality or confederation gives you

00:57:32.085 --> 00:57:39.627
money, they don't expect anything from the other side. They subsidize you outright for an activity that is being considered, because

00:57:39.627 --> 00:57:45.226
there are subsidy rules, and you can benefit from this subsidy. But there's no VAT on the subsidy.

00:57:46.180 --> 00:57:53.366
So if we keep in mind again what I told you, it's give and take, you're going to receive money from someone, the canton, the

00:57:53.309 --> 00:57:56.503
confederation, the communes, on which you won't pay VAT.

00:57:56.560 --> 00:58:04.936
And then, once again, the authorities are going to tell you, I don't agree that, in return, you can reclaim all the VAT. You don't

00:58:04.873 --> 00:58:10.077
pay VAT to me on part of it, so you can't reclaim it all on the other side either.

00:58:10.340 --> 00:58:20.334
And then, the authorities say, when you have subsidies, you have to reduce the VAT, correct the VAT that you would like to

00:58:20.253 --> 00:58:26.539
reclaim, precisely to align the fact that you don't pay VAT with this subsidy.

00:58:26.620 --> 00:58:28.160
So on the other side, you have to correct too.

00:58:28.160 --> 00:58:37.640
It's too complicated, I don't know how to do it.

00:58:38.000 --> 00:58:48.750
You take the amount of the subsidy you've received and tax it. You consider that the amount includes VAT. So if you've received a subsidy of 100,

00:58:48.677 --> 00:58:59.207
you'll calculate 8%, 8.1% inside and then you'll pay, you can, it's not an obligation, it's a choice, you pay 8.1% to the administration inside.

00:58:59.280 --> 00:59:04.380
You won't get 100 in subsidies any more, you'll get 92 in the end, because you'll be paying 8 to Bern.

00:59:04.380 --> 00:59:10.700
And by doing so, you don't have to ask how much I should correct, should I correct 1 franc, 2 francs, 3 francs, etc.?

00:59:10.700 --> 00:59:15.620
So this is an opportunity, a solution provided by the administration.

00:59:15.620 --> 00:59:20.680
Then you have to calculate whether it's best to impose one or correct the other.

00:59:20.680 --> 00:59:23.600
So maybe that's where specialists are still needed.

00:59:23.840 --> 00:59:32.302
But it's a situation, if you have in your business grant, or someone's talking to you about it, you hear it in your business, you can just turn on the

00:59:32.246 --> 00:59:39.984
light, VAT, we've corrected something, not something, how do we do it, did we forget, did you think of that, ah no we didn't think of that.

00:59:40.040 --> 00:59:43.620
At least you've got a light on the subject.

00:59:52.480 --> 01:00:05.030
how to correct? What activities are included in this example of a subsidy? Subsidies, tourist tax revenues, I don't

01:00:04.922 --> 01:00:09.212
think you're affected by this situation.

01:00:09.320 --> 01:00:20.540
The final point concerns contributions to water supply and waste treatment. This is also a contribution, or we could call it a subsidy.

01:00:21.280 --> 01:00:29.419
These are earmarked subsidies. So it's not very common. But if you have one of these three categories, you'll be

01:00:29.348 --> 01:00:32.989
affected by the VAT correction you'll have to make.

01:00:33.060 --> 01:00:41.440
And then on the other side, you have activities that are non-activities. Because, once again, you're not paying to receive something.

01:00:41.440 --> 01:00:47.078
When you make a donation, then receive a donation of 100 francs, when you donate 100 francs to the happiness chain, you

01:00:47.031 --> 01:00:50.013
don't expect the happiness chain to give you anything in return.

01:00:50.060 --> 01:00:56.660
You give these 100 francs and that's the end of it. So there's no exchange of services. We're not in business.

01:00:56.660 --> 01:01:02.600
So when the Happiness Chain receives donations, from a VAT point of view, OK, there's nothing to worry about.

01:01:02.600 --> 01:01:09.420
It's the same with other activities, dividends, contributions, deposits, damages and interest.

01:01:09.860 --> 01:01:15.852
If your building burns down and then you have the cantonal establishment reimbursing you, I don't know, a million because

01:01:15.803 --> 01:01:19.651
you're insured and you receive the insurance reimbursement, that's contractual.

01:01:19.700 --> 01:01:22.780
You received the insurance reimbursement, there was no exchange behind it.

01:01:22.780 --> 01:01:25.620
So that, too, is typically damage and interest.

01:01:25.620 --> 01:01:30.620
You don't have to pay VAT on this, there's nothing, there's no correction to consider or anything.

01:01:37.400 --> 01:01:47.450
I've put some examples here. You'll receive the presentation, Juliette, I imagine. The videos. Perfect. So, you'll have here a few examples of

01:01:47.311 --> 01:01:56.806
relatively, shall we say, simple activities, which will enable you to find out whether, depending on what you're doing, you'll be able to

01:01:56.806 --> 01:02:05.261
recover your skills. I'm not being exhaustive, of course, but in relation to these activities, can you reclaim VAT or not?

01:02:05.400 --> 01:02:11.448
And then, the example at the far end of the subsidy, where it's a little green, a little red, because you're going to

01:02:11.397 --> 01:02:14.649
recover part of it, you'll also have to correct part of the VAT.

01:02:14.700 --> 01:02:33.360
If you're going to walk away with something, keep this give-and-take in mind. If you want to get something back, you have to pay for it.

01:02:35.240 --> 01:02:41.180
So pay because you're doing something in Switzerland, or pay at zero, that's exports.

01:02:41.180 --> 01:02:46.480
Exports are conceptually equivalent to paying, but at zero percent.

01:02:46.480 --> 01:02:52.920
If there in the middle, you have activities, a situation, where when you take your profit loss,

01:02:52.920 --> 01:02:59.060
you discover that there are activities or sales on which you don't pay VAT,

01:02:59.060 --> 01:03:02.480
or not included in your VAT statement,

01:03:03.640 --> 01:03:11.900
Turn on the light. Can I or can't I? Should I correct my VAT or not?

01:03:11.900 --> 01:03:24.200
That's the first step. You don't have to be a specialist in this area, but at least you'll be able to see your VAT statement,

01:03:24.200 --> 01:03:31.120
or someone says, "Ah, but in my VAT statement, I only include transactions that are subject to VAT.

01:03:31.120 --> 01:03:32.540
And the others? Ah, I don't put them on.

01:03:32.540 --> 01:03:35.260
Okay, but what about the others?

01:03:35.260 --> 01:03:39.120
Can I reclaim VAT on the others, or can't I reclaim VAT on the others?

01:03:39.120 --> 01:03:43.360
Do you agree?

01:03:43.360 --> 01:03:46.300
And if your VAT statement includes activities where you pay VAT,

01:03:46.300 --> 01:03:47.600
and then activities where you don't pay,

01:03:47.600 --> 01:03:49.480
once again, the light to say,

01:03:49.480 --> 01:03:51.820
but it's weird because I'm counting everything.

01:03:51.820 --> 01:03:54.480
Is it right or wrong?

01:03:54.480 --> 01:03:55.660
So maybe that's fair, because then again,

01:03:55.660 --> 01:03:57.620
if we have exports, etc., it can be fair.

01:03:57.620 --> 01:03:59.320
But maybe not.

01:04:00.500 --> 01:04:03.480
So the idea is not to make it a three-day study.

01:04:03.480 --> 01:04:05.900
At the very least, the first thing you do is make a phone call and ask yourself the question.

01:04:05.900 --> 01:04:07.020
J'ai ça, j'ai ça.

01:04:07.020 --> 01:04:08.580
Then we'll tell you, yes, listen, it's okay, there's nothing to worry about.

01:04:08.580 --> 01:04:11.060
There are maybe two or three exchanges,

01:04:11.060 --> 01:04:12.380
two or three questions that need to be asked.

01:04:12.380 --> 01:04:14.760
But whenever you're in doubt,

01:04:14.760 --> 01:04:17.100
it's always easier to raise doubts.

01:04:17.100 --> 01:04:19.040
Because if you go on like this for three or four years,

01:04:19.040 --> 01:04:20.240
then you have the control that comes after,

01:04:20.240 --> 01:04:23.860
then you've simplified and misunderstood it,

01:04:23.860 --> 01:04:26.800
by negligence, applied a situation like that for three years,

01:04:26.800 --> 01:04:28.780
il va corriger.

01:04:28.980 --> 01:04:31.960
then you'll receive notification when the correction is complete,

01:04:31.960 --> 01:04:35.000
then you feel you're doing the fundamentally right thing,

01:04:35.000 --> 01:04:38.340
except that here, in the middle, there's a side effect that's been overlooked.

01:04:38.340 --> 01:04:42.400
And if now all that, it's complicated,

01:04:42.400 --> 01:04:48.700
because you're under the impression that you have to do the math,

01:04:48.700 --> 01:04:52.400
and then you don't know how to take these calculations or how to do these calculations,

01:04:52.400 --> 01:04:54.660
so I'll hand over to Claire,

01:04:54.660 --> 01:04:58.880
which will explain how to make things easier,

01:04:58.980 --> 01:05:01.760
via the flat-rate method

01:05:01.760 --> 01:05:04.160
that some of you may be using

01:05:04.160 --> 01:05:05.840
while its advantages, of course

01:05:05.840 --> 01:05:07.560
but it also has its disadvantages

01:05:07.560 --> 01:05:09.680
from a VAT point of view

01:05:09.680 --> 01:05:11.960
Claire?

01:05:11.960 --> 01:05:13.900
Frédéric?

01:05:13.900 --> 01:05:23.760
I will now yield the floor to

01:05:23.760 --> 01:05:25.480
to Mrs Claire Hubacher

01:05:25.480 --> 01:05:27.540
who is VAT Director at BDO

01:05:27.540 --> 01:05:30.220
Law degree with LLM in business law

01:05:30.220 --> 01:05:32.140
After 11 years in the big four

01:05:32.140 --> 01:05:33.620
She joined BDO in 2016

01:05:33.620 --> 01:05:35.860
She was also a member of the technical commission

01:05:35.860 --> 01:05:37.380
Straight from the Swiss experts

01:05:37.380 --> 01:05:40.580
Just before, I see that the few questions

01:05:40.580 --> 01:05:41.360
Starting to arrive

01:05:41.360 --> 01:05:43.340
I know this is a complex subject

01:05:43.340 --> 01:05:45.600
Don't hesitate, start asking!

01:05:45.600 --> 01:05:47.360
As soon as you have something to react to

01:05:47.360 --> 01:05:50.060
Go ahead, I imagine it's all very stimulating.

01:05:50.060 --> 01:05:52.240
Your personal cases perhaps

01:05:52.240 --> 01:05:53.460
Do you have any questions about it?

01:05:53.460 --> 01:05:55.540
Don't hesitate, we'll be back

01:05:55.540 --> 01:05:56.940
Just after this presentation, thank you very much

01:05:57.540 --> 01:06:01.340
Thank you Frédéric. Hello, everyone.

01:06:01.340 --> 01:06:08.040
I'm going to talk to you this morning about the lump-sum settlement method.

01:06:08.040 --> 01:06:12.120
I didn't go the right way. There, beautiful.

01:06:12.120 --> 01:06:19.320
We have two of these, called the net tax debt rate method and the flat rate method, which I'm going to talk about this morning.

01:06:19.920 --> 01:06:31.720
I'd also like to mention a few changes that were introduced at the beginning of this year, affecting these methods in particular.

01:06:31.720 --> 01:06:43.040
So, as Olivier said, this is a simplified method of invoicing in which VAT is paid but not fully recovered.

01:06:43.040 --> 01:06:48.080
This is known as the lump-sum method, as opposed to the actual method.

01:06:48.780 --> 01:06:52.020
In other words, the effective method is generally the classic method when it comes to subjection.

01:06:52.020 --> 01:06:57.340
We'll calculate our sales, we'll pay VAT on our sales

01:06:57.340 --> 01:07:01.500
and in return, we'll be able to recover, as Olivier explained in detail,

01:07:01.500 --> 01:07:05.420
advance tax on expenses related to our business.

01:07:05.420 --> 01:07:09.840
There are cases where, for example, it's too complicated

01:07:09.840 --> 01:07:12.940
or because the advance tax is not necessarily very high

01:07:12.940 --> 01:07:17.580
where you can decide to deduct VAT using the flat-rate method.

01:07:18.480 --> 01:07:26.390
I'll explain to you afterwards the distinction between the net tax debt rate method, which I'll abbreviate TDFN, if you

01:07:26.325 --> 01:07:29.855
don't mind, it'll be easier, and the flat rate method.

01:07:29.920 --> 01:07:44.340
I'd like to start by reminding you of the legal basis for the SDLT method in article 37 of the law and article 97 of the VAT Act for flat rates.

01:07:44.900 --> 01:07:52.834
That's the equal basis. What's interesting, especially in practice, is the VAT information, because you probably know that the

01:07:52.772 --> 01:07:57.978
Federal Tax Administration publishes its written practice in quite a voluminous way.

01:07:58.040 --> 01:08:08.220
You can find all this on the AFC website, and there's one for net tax debt rates and one for flat rates that give you a wealth of information.

01:08:08.880 --> 01:08:10.820
Sometimes it's hard to find your way around because there are so many things.

01:08:10.820 --> 01:08:14.960
It's not always very clear, but it's a good source of information.

01:08:14.960 --> 01:08:16.700
and it may answer some of your questions.

01:08:16.700 --> 01:08:26.320
This is a simplified counting method which is applied according to your field of activity.

01:08:26.320 --> 01:08:29.240
Depending on the industry in which you work,

01:08:29.240 --> 01:08:33.680
rates have been set according to your activity.

01:08:33.680 --> 01:08:38.500
On the basis of statistics, the FTA has determined that in such and such a field of activity,

01:08:38.660 --> 01:08:43.860
In principle, we had an average VAT recovery percentage.

01:08:43.860 --> 01:08:49.580
These rates, which apply to flat-rate methods, are determined according to the field of activity.

01:08:49.580 --> 01:08:53.840
The aim is to more or less reflect the situation you would be in.

01:08:53.840 --> 01:09:00.580
if you were using the effective method in a classic, normal effective method situation.

01:09:00.580 --> 01:09:05.760
These tax rates are specific to each industry.

01:09:07.100 --> 01:09:13.500
And it's calculated by multiplying sales including VAT by the rate.

01:09:13.500 --> 01:09:19.220
There are several rates. Several industries have the same rates.

01:09:19.220 --> 01:09:26.140
If you have sales of 100,000 francs including VAT, you take your sales including VAT

01:09:26.140 --> 01:09:31.120
and multiply it by the flat rate that corresponds to your activity.

01:09:31.120 --> 01:09:35.420
This is the amount you have to pay to the Federal Tax Administration.

01:09:36.580 --> 01:09:42.980
So you only take into account the sales part, not at all the expenses and advance taxes.

01:09:42.980 --> 01:09:50.500
So it's in this sense, in fact, that it's a simplified settlement method, i.e. all the advance tax part,

01:09:50.500 --> 01:09:57.680
finally, all the data already entered on supplier invoices is not important for VAT purposes, and you won't have to

01:09:57.619 --> 01:10:00.319
bother with complicated calculations either.

01:10:00.380 --> 01:10:05.120
correction of input tax deductions. So, only the sales part is taken into account.

01:10:05.720 --> 01:10:13.886
On the other hand, and this is something we often see, when we apply VAT to the flat-rate method, the invoices we issue

01:10:13.818 --> 01:10:16.652
to customers are still at the legal rates.

01:10:16.720 --> 01:10:21.340
So flat rates are something that is internal to your accounting method, to your company.

01:10:21.340 --> 01:10:25.640
Customer invoices are the same, whatever your billing method.

01:10:25.640 --> 01:10:32.980
So you'll be invoicing at the legal rates of 8.1, 2.6, 3.8, depending on the field you're in and the service you're invoicing.

01:10:33.260 --> 01:10:42.260
This amount is then used, including VAT, to calculate the amount of VAT you have to pay to the Federal Tax Administration.

01:10:42.260 --> 01:10:51.200
What you need to know is that when you apply these flat-rate methods, you can no longer opt out.

01:10:51.200 --> 01:10:58.180
So the option is a choice that allows you, when you have income that is excluded from the scope of taxation,

01:10:58.180 --> 01:11:05.180
The most classic example is real estate income, where you can voluntarily decide to charge VAT.

01:11:05.180 --> 01:11:08.400
So what's the point, you might ask, of charging VAT?

01:11:08.400 --> 01:11:11.060
Well, that's because it allows you to reclaim advance tax.

01:11:11.060 --> 01:11:19.640
So when we apply the flat-rate method, we no longer have this option, since only the taxable portion is decisive.

01:11:19.640 --> 01:11:26.180
So, to pick up on something Olivier said earlier, even when you use the flat-rate method, you have to include everything in your statement.

01:11:26.180 --> 01:11:31.280
So just because we calculate VAT on taxable sales doesn't mean we can't declare the rest.

01:11:31.280 --> 01:11:41.340
You still have to declare other income, especially excluded income, because the radio and TV licence fee is calculated on the total amount of sales.

01:11:41.340 --> 01:11:48.945
So, even when you use the flat-rate method, the FCA will check that you have declared everything correctly, because

01:11:48.880 --> 01:11:51.675
this allows us to bill you an adjusted fee.

01:11:54.040 --> 01:12:02.040
A very, very important point, if you choose the flat-rate method, we've talked several times before about acquisition tax,

01:12:02.040 --> 01:12:07.900
when you use the flat-rate method, you still have to pay tax on acquisitions.

01:12:07.900 --> 01:12:18.580
This means that all your legal, advertising and marketing invoices from foreign suppliers still have to pay VAT.

01:12:18.580 --> 01:12:25.584
That doesn't change. You're a tax-exempt company, you have to declare the tax on acquisitions. On the other hand, the bad news is that

01:12:25.533 --> 01:12:30.529
with the flat-rate method, you don't recover VAT on these invoices from foreign suppliers either.

01:12:30.580 --> 01:12:36.397
So that's something you also have to take into account when choosing your accounting method, because we often say to ourselves,

01:12:36.352 --> 01:12:40.275
"Yes, in Switzerland, my business is fairly easy, so I'll choose the flat-rate method".

01:12:40.320 --> 01:12:46.348
And then, in fact, we forgot that we were going to have lots of foreign suppliers and that maybe it wasn't quite the best option to take the

01:12:46.305 --> 01:12:50.677
flat-rate method because we'd have to pay all the VAT on our invoices without being able to reclaim it.

01:12:50.720 --> 01:12:59.360
This is an important point that is often overlooked. Even with the flat-rate method, tax is deducted on acquisitions and VAT is not recovered.

01:12:59.360 --> 01:13:08.380
These are general principles that apply to both methods, net tax debt rates and flat rates.

01:13:08.940 --> 01:13:16.720
Now, let's take a closer look at how these methods work and what the difference is between them.

01:13:16.720 --> 01:13:24.020
The net tax liability rate method is in fact the general flat-rate settlement method.

01:13:24.020 --> 01:13:33.600
We'll see shortly that flat rates apply in certain special cases, and when they don't, net tax rates apply.

01:13:35.620 --> 01:13:40.400
In order to apply the back-to-back method of net tax debt, certain thresholds must be met.

01:13:40.400 --> 01:13:49.520
This means sales of less than 5.24 million and a VAT liability of less than 108,000.

01:13:49.520 --> 01:13:56.720
So if a company's sales or VAT liability is higher than that, the question doesn't even arise.

01:13:56.720 --> 01:14:02.700
It is not possible to count using the flat-rate method; only the effective method remains.

01:14:04.700 --> 01:14:08.660
So that's one criterion at the outset, but it's also an ongoing criterion.

01:14:08.660 --> 01:14:13.000
So throughout the business, when we calculate net tax debt using the rate method,

01:14:13.000 --> 01:14:16.620
we have to keep an eye on these thresholds, because if they are exceeded,

01:14:16.620 --> 01:14:20.420
we'll see later that there are consequences for the counting method.

01:14:20.420 --> 01:14:23.340
So that's definitely something to keep an eye on,

01:14:23.340 --> 01:14:25.860
because it's a nasty surprise when you realize, a few years later

01:14:25.860 --> 01:14:28.260
in fact, it's been three years since we were supposed to count using the actual method

01:14:28.260 --> 01:14:29.720
and must be corrected.

01:14:29.720 --> 01:14:33.580
This is not good news.

01:14:34.700 --> 01:14:41.920
There is a list of taxable persons who are not entitled to count using the TDFN method.

01:14:41.920 --> 01:14:45.980
I haven't listed them all, but I've included a few that speak for themselves.

01:14:45.980 --> 01:14:50.780
This is particularly the case for those who can deduct VAT using the flat-rate method.

01:14:50.780 --> 01:14:53.520
As a result, they are obviously unable to apply the SFDT.

01:14:53.520 --> 01:14:59.820
Those who apply the import tax deferral procedure.

01:14:59.820 --> 01:15:03.280
Nor is it permitted to apply net tax debt rates.

01:15:04.160 --> 01:15:11.597
In the case of group taxation, if you have several companies in Switzerland and you join forces to form a VAT tax group, and you have a

01:15:11.543 --> 01:15:16.646
single VAT number for several companies, you can't use the lump-sum method of taxation either.

01:15:16.700 --> 01:15:20.660
All companies in the VAT tax group must use the effective method.

01:15:25.240 --> 01:15:29.900
And then, this year, we have a new article in the law for digital platforms.

01:15:29.900 --> 01:15:33.240
So I'm not going to go into the details of the digital platform,

01:15:33.240 --> 01:15:37.680
but it's also not possible for digital platforms to deduct VAT at the FNST.

01:15:37.680 --> 01:15:40.780
And neither do companies headquartered abroad.

01:15:40.780 --> 01:15:47.500
There are other cases - these are the main ones - in which net tax debt rates cannot be applied.

01:15:50.780 --> 01:15:56.760
At what point can net tax debt rates be applied? How does it start?

01:15:56.760 --> 01:16:00.740
The most common case is when a company is subject to VAT.

01:16:00.740 --> 01:16:08.700
And when you fill in your tax questionnaire online, you'll be asked a whole series of questions, including the method of calculation.

01:16:08.700 --> 01:16:12.600
The default settlement method, if you don't request anything in particular, will be the effective method.

01:16:12.600 --> 01:16:17.860
So if you want to apply a flat-rate method, you'll have to say so at the time of assessment.

01:16:18.280 --> 01:16:23.780
When you fill in the questionnaire, you can choose the net tax debt rate method.

01:16:23.780 --> 01:16:32.820
But if, for one reason or another, you decided to opt for the effective method at the time of taxation, you can always change the method after the fact.

01:16:32.820 --> 01:16:38.260
It's not definitive. There are deadlines in both directions, but you can always change your method.

01:16:38.260 --> 01:16:44.180
To switch from the effective method to the TDFN method, we have to wait three years.

01:16:44.580 --> 01:16:52.912
So you have to have completed three full years at the effective method and then you can contact the AFC and say ok next year I'd like to

01:16:52.792 --> 01:17:00.525
be at the TDFN. It's always for the beginning of the year. You can't just say "I've had enough, let's change the method, it's too

01:17:00.525 --> 01:17:05.200
complicated". That's not possible. It's a full year, we change on January 1st.

01:17:06.120 --> 01:17:13.370
There's a specific form for this, called declaration of adherence to the net tax liability method, which must be

01:17:13.306 --> 01:17:17.376
completed no later than 60 days after the beginning of the year.

01:17:17.440 --> 01:17:25.881
So if all of a sudden, on hearing this, you say to yourself, oh yeah, the SDLT method next year, I'd like that, you can already ask the FCA,

01:17:25.822 --> 01:17:32.421
but at the latest, you'll have to do it before February 28, 2026, so that it can be applied on January 1, 2026.

01:17:32.480 --> 01:17:34.480
Otherwise, it's always for the following year.

01:17:36.120 --> 01:17:43.495
And the only exception is if there's a change in the rates, so not the legal rates, but the flat rate that applies to your field of activity, so yours,

01:17:43.446 --> 01:17:50.531
because there is one that changes, but if the one you apply changes, then you have the right, regardless of these deadlines, to change your method.

01:17:55.280 --> 01:17:59.340
And when does the TDFN method end?

01:17:59.340 --> 01:18:01.340
So, the most classic is at the time of write-off.

01:18:01.340 --> 01:18:06.300
You stop your activity, the company is liquidated, or you stop or postpone for X reasons.

01:18:06.300 --> 01:18:10.060
We request that you be removed from the VAT register.

01:18:10.060 --> 01:18:12.020
Inevitably, the counting method comes to an end.

01:18:12.020 --> 01:18:17.260
The other, and most frequent, change is the decision to switch to the effective method.

01:18:17.260 --> 01:18:21.300
The flat-rate method was too easy.

01:18:21.300 --> 01:18:24.380
We said to ourselves, we're going to make a few calculations, some advance tax corrections.

01:18:24.460 --> 01:18:29.420
moves on to the actual method. So that's one possibility. The deadlines are the same. For

01:18:29.420 --> 01:18:33.600
change method, you must also comply with the 60-day time limit, notify the FCA with a

01:18:33.600 --> 01:18:40.260
form to tell them you'd like to change your method. Where it's not a choice,

01:18:40.260 --> 01:18:43.800
but one obligation is if the thresholds are exceeded. So, as I said at the beginning

01:18:43.800 --> 01:18:48.320
that there was a sales threshold and a VAT threshold below which you had to

01:18:48.320 --> 01:18:56.520
be to stay in the TDFM, if you pass them, it's a little light that has to come on

01:18:56.520 --> 01:18:59.800
to say, "Okay, I've exceeded the thresholds, what's going on? So the first year

01:18:59.800 --> 01:19:05.720
nothing happens, but if it happens again after three years, it used to be two, now it's two.

01:19:05.720 --> 01:19:11.860
is three, after three years in which these thresholds are exceeded each time, on the fourth

01:19:11.860 --> 01:19:17.720
year you are obliged to switch to the effective method. So that's what I really like.

01:19:17.720 --> 01:19:21.940
your attention to this because if, for three years, you have been using the

01:19:21.940 --> 01:19:25.540
and you have to pay back all the advance tax you have paid.

01:19:25.540 --> 01:19:28.540
you've completely disregarded for three years, it's a bit of a pain in the ass.

01:19:28.540 --> 01:19:38.240
How do you account for VAT when you're with TDFN? So how do you calculate it?

01:19:38.240 --> 01:19:43.040
Okay, but how often? In fact, at the TDFN, we settle VAT half-yearly.

01:19:43.740 --> 01:19:45.380
This means that there are two counts per year.

01:19:45.380 --> 01:19:50.880
Unlike the actual method, where we have quarterly statements, there are four per year.

01:19:50.880 --> 01:19:56.800
And since this year, we have been able to request an annual statement.

01:19:56.800 --> 01:20:04.280
I'll talk about this in detail a little later, but it means that instead of having two, you only have to fill in one VAT statement.

01:20:09.060 --> 01:20:15.820
Another relatively important change this year is that the number of TDFNs is no longer limited.

01:20:15.820 --> 01:20:21.000
Until now, for those of you who apply this method, you know that in principle, we had one or two rates.

01:20:21.000 --> 01:20:29.040
That's also why we called it a simplified method, not just because we didn't have to take into account the whole pre-tax part,

01:20:29.040 --> 01:20:33.740
but also because, in principle, only one or two rates were applicable to the entire business.

01:20:33.740 --> 01:20:43.200
So we looked at the main activity. Based on this, a rate was granted by the FCA, and all activity was deducted at this rate.

01:20:43.200 --> 01:20:49.600
As of this year, there is no longer a limit. In fact, there is a 10% criterion.

01:20:49.600 --> 01:20:58.220
If an activity represents more than 10% of sales, it must be deducted at the corresponding flat rate.

01:20:59.120 --> 01:21:01.600
This means more rates.

01:21:01.600 --> 01:21:07.740
It's a simplified method that becomes a little less simple because you'll have to add a few more rates.

01:21:07.740 --> 01:21:15.780
This means you need to look at the different activities you carry out, and see what they represent in relation to total sales.

01:21:15.780 --> 01:21:19.400
And then apply the corresponding flat rates.

01:21:23.780 --> 01:21:31.540
Authorization for rates is now done via the e-portal, where you fill in your statements electronically.

01:21:31.540 --> 01:21:38.320
Authorization is now given directly through this channel, at the time of declaring sales.

01:21:38.320 --> 01:21:45.193
On the other hand, if you cease an activity, either because it is one you will no longer carry out or because the

01:21:45.133 --> 01:21:48.480
threshold is no longer reached, you must inform the FCA.

01:21:48.940 --> 01:21:51.480
You can't just spontaneously say, okay, I don't do that anymore, I'll delete it.

01:21:51.480 --> 01:21:56.420
You are obliged to contact the FCA to have a rate removed.

01:21:56.420 --> 01:22:00.280
And then, a little practical clarification.

01:22:00.280 --> 01:22:02.920
So, there's the TV1 info I mentioned at the beginning,

01:22:02.920 --> 01:22:06.300
on net tax debt rates, there is a list of all rates

01:22:06.300 --> 01:22:07.880
and all branches, in fact.

01:22:07.880 --> 01:22:10.880
You will find a number of pages detailing all activities

01:22:10.880 --> 01:22:15.260
in alphabetical order and then give you the rates that apply

01:22:15.260 --> 01:22:20.300
depending on the field you're in and, above all, the income you generate.

01:22:20.300 --> 01:22:24.060
Because that's what's decisive, not just the sector in which you're active,

01:22:24.060 --> 01:22:26.840
is the type of income you generate.

01:22:26.840 --> 01:22:36.380
The flat-rate method is very close to net tax debt rates,

01:22:36.380 --> 01:22:39.240
but it is reserved for certain elected officials.

01:22:39.240 --> 01:22:44.520
Public authorities: Confederation, cantons, municipalities and all groups of municipalities,

01:22:44.520 --> 01:22:48.780
This means that all public authorities that use the flat-rate method will be subject to TAF.

01:22:48.780 --> 01:22:59.680
In addition, certain legal forms, such as associations and foundations, can and must use the flat rate.

01:22:59.680 --> 01:23:06.860
This applies, for example, to schools, clinics, HOMs and EMSs.

01:23:06.860 --> 01:23:15.860
If they choose the flat-rate method, which is often the case, they will declare their VAT on a self-assessment basis.

01:23:15.860 --> 01:23:22.660
I'd like to take this opportunity to give an additional indication when choosing the method.

01:23:22.660 --> 01:23:36.840
Often, when we choose a flat-rate method, it's because it's simpler, but it's also generally because we have a business that's in...

01:23:36.840 --> 01:23:43.593
excluded from the scope of taxation. As a result, the portion of input tax that can be reclaimed is relatively small, which is

01:23:43.540 --> 01:23:47.127
why it's a good idea to use a simplified method for calculating VAT.

01:23:47.180 --> 01:23:56.745
The other special feature of taffes is that there are no limits. Unlike the TDFN, there is no other limit to taffes, as long

01:23:56.670 --> 01:24:01.605
as you meet the conditions of those entitled to apply flat rates.

01:24:03.920 --> 01:24:10.780
The flat-rate method is possible, of course, even at the start of liability, at the time of registration.

01:24:10.780 --> 01:24:15.300
So it's the same: when you register, you say I'd like to deduct VAT at the flat rate.

01:24:15.300 --> 01:24:23.080
And then there's the possibility of switching from the effective method to the TAF, this time after a tax period.

01:24:23.080 --> 01:24:28.840
This means that you can change the method more quickly if you wish to deduct VAT differently.

01:24:28.840 --> 01:24:39.340
There's a specific form. I've given you the number of the form, but these are things you can find relatively easily on the AFC website.

01:24:39.340 --> 01:24:45.043
And here again, if there's a change in rate, i.e. a flat rate in the branch, you also have the right to change your method

01:24:44.997 --> 01:24:47.434
at that time, even if you're not within the deadline.

01:24:47.480 --> 01:24:57.580
The same applies to the end of the flat-rate method, at the end of the tax liability period or when you wish to change method.

01:24:58.840 --> 01:25:07.520
VAT statement is quarterly, so TDFN is half-yearly, TAF and the method

01:25:07.520 --> 01:25:12.280
effectively quarterly and for both there is also the possibility of deducting

01:25:12.280 --> 01:25:19.880
on an annual basis, with a single statement per year. The difference with TDFN is

01:25:19.880 --> 01:25:25.880
that at TAF you'll have as many rates as activity, so at TDFN we said it depends,

01:25:25.880 --> 01:25:32.480
it has to represent more than 10% of your sales for a rate to be granted.

01:25:32.480 --> 01:25:36.620
At the TAF, you have to take each income and determine the rate that applies.

01:25:36.620 --> 01:25:42.320
So even if you have a small business, such as a school or EMS, you have little taxable sales,

01:25:42.320 --> 01:25:48.620
but you can have a lot of different rates because, in fact, there are lots of different small incomes that don't have to be deducted at the same rate.

01:25:51.500 --> 01:25:58.880
Another point of clarification for TAFs is that, in fact, the flat-rate brochure and the rules applying to flat rates are specific.

01:25:58.880 --> 01:26:09.500
And the rules that you wouldn't find, in fact, in the flat-rate brochure, or the flat rates themselves, are specific to the entities that can apply TAF,

01:26:09.500 --> 01:26:14.100
everything else, in fact, comes under the heading of net tax debt rates.

01:26:18.520 --> 01:26:27.117
Now for a few interesting new features. I'm going to talk about the annual statement and then the changes in relation to these statement methods. The

01:26:27.060 --> 01:26:35.543
first thing I'd like to talk to you about today, which is a really important change, was introduced into the ordinance at the beginning of this year.

01:26:36.280 --> 01:26:44.468
So there's been a change in the ordinance which has had an impact on flat-rate settlement methods, making them less attractive and less

01:26:44.408 --> 01:26:51.640
straightforward, because until now, if the conditions were met, it was possible to change the method within the deadline.

01:26:51.700 --> 01:26:56.420
we could change a method relatively easily without any major impact.

01:26:56.420 --> 01:27:01.120
So, as I told you before, in general, when we chose a flat-rate method,

01:27:01.120 --> 01:27:08.140
was that we didn't have any advance tax significantly higher than the industry's usual activity.

01:27:08.140 --> 01:27:12.640
So when we were in an investment period or had investment projects,

01:27:12.640 --> 01:27:17.560
in general, we opted for the effective method rather than the flat-rate method,

01:27:17.560 --> 01:27:21.920
as I've already said, reflect the usual activity.

01:27:21.920 --> 01:27:25.660
So if you have unusual activity and are planning to make investments,

01:27:25.660 --> 01:27:28.640
in general, the effective method was chosen.

01:27:28.640 --> 01:27:32.340
So it's still valid, but it's nuanced by this new feature.

01:27:32.340 --> 01:27:37.720
Now, when we change methods, we have to make a correction.

01:27:37.720 --> 01:27:41.100
That is, if we use the effective method,

01:27:41.100 --> 01:27:45.520
we were able to recover the actual VAT incurred

01:27:45.520 --> 01:27:54.452
Depending on what you've paid, depending on your sales, you get an effective recovery. It may not be total, but it is effective. When

01:27:54.386 --> 01:28:00.274
we switch to the flat-rate method, we'll have to correct some of the VAT we've recovered.

01:28:01.200 --> 01:28:10.403
So if I take the example of a building I built ten years ago, I built a building, it was used exclusively for taxable activities, I

01:28:10.334 --> 01:28:17.531
reclaimed all the VAT on my building, on the construction, on the work I did afterwards, it was perfect.

01:28:17.600 --> 01:28:24.439
And now I'm thinking it's just too complicated, I'll switch to the flat-rate method, my calculation is relatively simple, I'll

01:28:24.386 --> 01:28:28.447
stop bothering with these calculations, I'll switch to the flat-rate method.

01:28:29.800 --> 01:28:38.120
Mind you, I built a building 10 years ago, and I reclaimed all the VAT on it. The lifespan of a building for VAT purposes is 20 years.

01:28:38.120 --> 01:28:46.320
So when I switch to the flat-rate method, I'll have to pay back the remaining value, the residual value of this VAT.

01:28:46.320 --> 01:28:47.940
So in this case, half.

01:28:47.940 --> 01:28:55.800
So the aim of this change is to avoid tax planning and optimization by switching to the effective method,

01:28:56.200 --> 01:29:02.800
When you have investments and VAT to recover, you can switch back to the flat-rate method when it's simpler and you're in the normal phase.

01:29:02.800 --> 01:29:08.948
So be careful, when you're using the effective method, if you want to switch to the flat-rate method, you have to

01:29:08.894 --> 01:29:11.246
really question the investments you've made.

01:29:11.300 --> 01:29:15.040
Of course, the calculation is also possible in the other direction.

01:29:15.040 --> 01:29:20.440
In other words, if, when I built my building 10 years ago, I used the flat-rate method, I didn't get anything back.

01:29:21.660 --> 01:29:26.760
Now that I've changed my method, I can reclaim half of the VAT that I didn't reclaim at the time.

01:29:26.760 --> 01:29:29.020
So the calculation works both ways.

01:29:29.020 --> 01:29:33.320
Of course, there's a sense of obligation when you have to pay the AFC again,

01:29:33.320 --> 01:29:40.520
It's more a question of my own interest than of obligation.

01:29:40.520 --> 01:29:45.640
On the other hand, what's likely to be difficult is that for 10 years, you've used the flat-rate method,

01:29:45.640 --> 01:29:50.800
so perhaps we don't know exactly where the advance tax on the property is.

01:29:51.260 --> 01:29:56.960
Once we've used the headcount method, we'll have all the information we need to calculate investments.

01:29:56.960 --> 01:30:05.840
But if you've initially used the flat-rate method and then changed, it may be a little complicated to retrieve this information.

01:30:05.840 --> 01:30:13.831
So, morally speaking, from now on, you'll also have to keep everything to do with work and construction on

01:30:13.757 --> 01:30:17.826
investments, even if you're using the flat-rate method.

01:30:18.440 --> 01:30:28.500
So that's really a significant change in these methods, and one that somewhat reduces their advantage.

01:30:28.500 --> 01:30:36.460
And it also has an impact - I won't go into detail, but I'll mention it anyway - on asset transfers.

01:30:36.460 --> 01:30:46.780
When you transfer some or all of your assets, you can apply what's known as the declaration procedure to make the transfer VAT-neutral.

01:30:47.500 --> 01:30:57.540
This change will also have an impact on the procedure, making it less neutral than it has been up to now.

01:30:57.540 --> 01:31:08.440
The possibility of applying more than one rate, as I told you before, is also something that has just changed this year.

01:31:08.440 --> 01:31:14.940
If we have four activities representing more than 10%, we'll have four rates.

01:31:17.100 --> 01:31:23.620
For those of you who have been using flat rates up to now, you may be aware of this rule.

01:31:23.620 --> 01:31:31.500
In fact, there were different rules depending on the business sector you were in, as to whether you had one or two rates, and when you had a second rate.

01:31:31.500 --> 01:31:33.780
All these specific rules have been removed.

01:31:33.780 --> 01:31:41.331
The only rule that remains now, if you're on the flat rate, is that each activity, not on the flat rate, on the SDLT, is that each activity

01:31:41.277 --> 01:31:46.846
that represents more than 10% of the total, you must deduct it at the rate that corresponds to the area.

01:31:47.100 --> 01:31:55.540
and then if you have a new activity because you are diversifying your business

01:31:55.540 --> 01:31:59.280
so you have a new activity or one that's expanding

01:31:59.280 --> 01:32:07.240
and which newly exceeds 10% you must therefore also deduct with the corresponding rate.

01:32:07.240 --> 01:32:11.520
and this is the same timeframe as exceeding the thresholds, i.e. for 3 years.

01:32:11.520 --> 01:32:16.460
so if for 3 years you have an activity, a new activity or an existing activity

01:32:16.460 --> 01:32:18.800
which is growing and exceeding this 10% threshold,

01:32:18.800 --> 01:32:22.120
at which point you must also deduct it at the corresponding rate.

01:32:22.120 --> 01:32:28.060
And just to clarify, the rates have been redefined by the AFC,

01:32:28.060 --> 01:32:31.060
either rates or branch wordings.

01:32:31.060 --> 01:32:33.120
So, if that's a method you use,

01:32:33.120 --> 01:32:36.320
check that the rates you apply are still current.

01:32:36.320 --> 01:32:44.760
As I mentioned earlier, foreign taxable persons

01:32:44.760 --> 01:32:46.800
can no longer apply this method.

01:32:46.800 --> 01:32:50.800
A foreign insurer will therefore necessarily charge VAT using the effective method.

01:32:50.800 --> 01:32:54.980
There are a number of special procedures

01:32:54.980 --> 01:32:59.380
in cross-border transactions.

01:32:59.380 --> 01:33:05.640
which are now eliminated when the TDFN method is applied.

01:33:05.640 --> 01:33:11.280
So everything to do with the possibility of deducting VAT on exports,

01:33:11.900 --> 01:33:17.640
Fictitious input tax and margin taxation are no longer possible with the SFST.

01:33:17.640 --> 01:33:24.580
And when you need to request an additional rate, you can do so directly.

01:33:24.580 --> 01:33:26.100
So that's something simpler too.

01:33:26.100 --> 01:33:32.320
This can be done directly in the e-portal, since more and more things are now electronically available in the e-portal.

01:33:32.320 --> 01:33:36.980
This can be done directly at the time, with the AFC checking and validating afterwards.

01:33:37.740 --> 01:33:42.200
Well, I haven't tested it in practice yet, but it should work fine.

01:33:42.200 --> 01:33:51.920
If you want to make things simpler, you can deduct all your sales at the higher rate.

01:33:51.920 --> 01:33:58.940
So it's more a choice of simplicity than anything else, because if in theory you had, I don't know, 4 rates to apply,

01:33:58.940 --> 01:34:03.140
you can say, all my sales, I take the highest tax rate, it's simpler.

01:34:03.460 --> 01:34:04.780
But of course, it's going to cost you more.

01:34:04.780 --> 01:34:08.340
But it's an existing simplification.

01:34:08.340 --> 01:34:18.700
And all these changes raise the question of whether the flat-rate method is really still appropriate for your business.

01:34:18.700 --> 01:34:25.120
Or perhaps a switch to the actual method would make sense, but with an annual breakdown.

01:34:25.120 --> 01:34:29.220
This could be an interesting alternative to consider.

01:34:29.220 --> 01:34:32.680
And now I'm going to take a look at the annual statement.

01:34:33.460 --> 01:34:38.960
So, since January 1 of this year, you've been able to deduct VAT annually.

01:34:38.960 --> 01:34:45.500
Here too, there is a threshold to be respected, 5,000 or 5,000, before VAT can be deducted annually.

01:34:45.500 --> 01:34:51.600
And there's another important condition: to be able to request an annual statement,

01:34:51.600 --> 01:34:55.460
you have to submit your statements on time and pay the VAT on time.

01:34:55.460 --> 01:35:00.220
So this is a strict formal condition for obtaining this authorization.

01:35:00.220 --> 01:35:04.600
It is also a possibility for the AFC to withdraw the authorization.

01:35:04.600 --> 01:35:11.273
If you don't meet the deadline, the FTA may say that you are switching back to the half-yearly or quarterly settlement

01:35:11.217 --> 01:35:14.164
method, depending on which settlement method you use.

01:35:14.220 --> 01:35:20.060
However, you will complete only one statement per year.

01:35:20.060 --> 01:35:23.660
You'll make all your calculations, fill in the statement and submit it only once a year.

01:35:23.660 --> 01:35:26.460
However, you will have to pay a deposit.

01:35:26.460 --> 01:35:29.720
Advance payments are due on the usual dates.

01:35:29.720 --> 01:35:35.940
i.e. quarterly for TAF and the effective method, and half-yearly for TDFN.

01:35:35.940 --> 01:35:39.980
For TDFN, there will be a single down payment during the year, and then the amount at the end of the year.

01:35:39.980 --> 01:35:44.780
Down payments are calculated on the basis of the previous year.

01:35:44.780 --> 01:35:50.360
Down-payments are estimated on the basis of the previous year, and are due in these periods.

01:35:50.360 --> 01:35:56.380
You have to be careful, because interest on arrears is charged anyway.

01:35:56.380 --> 01:36:02.360
So if you make late payments at the end of the year, the FCA will calculate interest on arrears.

01:36:02.360 --> 01:36:11.300
And you should also bear in mind that you'll only find out about your tax liability at the end of the year, when you do your tax statement.

01:36:11.300 --> 01:36:17.120
But if you haven't made any changes to your advance payments, the FTA will assume that this is the amount you have to pay.

01:36:17.120 --> 01:36:24.280
So if you realize along the way that it's too high, you can't just say "I'll pay less, that'll be enough".

01:36:24.280 --> 01:36:28.240
If you don't, you'll be in for a nasty surprise.

01:36:28.240 --> 01:36:37.740
Accompaniments can also be found on the e-portal from April onwards for each year.

01:36:37.740 --> 01:36:43.240
You'll find the prepayments to be paid electronically directly in the e-portal, where you'll submit your VAT statement.

01:36:43.240 --> 01:36:53.220
And, as I said earlier, the settlement deadlines are May 30, August 30, November 30 for quarterly settlements and August 30 for half-yearly settlements.

01:36:54.280 --> 01:36:57.480
let me just say

01:36:57.480 --> 01:36:59.540
we asked to pass the time

01:36:59.540 --> 01:37:00.820
you pay to move up to 3rd

01:37:00.820 --> 01:37:03.140
if we just conclude there are a lot of questions that came up

01:37:03.140 --> 01:37:05.580
yes then it's almost finished

01:37:05.580 --> 01:37:07.520
no no it's fine

01:37:07.520 --> 01:37:09.620
that was it

01:37:09.620 --> 01:37:11.840
the only thing I wanted to say again was the delay

01:37:11.840 --> 01:37:13.220
to switch to demand

01:37:13.220 --> 01:37:15.540
is that it's February 28.

01:37:15.540 --> 01:37:17.400
so this year it's already

01:37:17.400 --> 01:37:19.640
but for next year

01:37:19.640 --> 01:37:21.340
must be requested before February 28

01:37:21.340 --> 01:37:23.340
to be deducted from the annual statement

01:37:23.340 --> 01:37:24.300
that's it

01:37:24.300 --> 01:37:34.860
without further ado we'll move on to the debate

01:37:34.860 --> 01:37:37.060
I invite our speakers to return to the stage

01:37:37.060 --> 01:37:41.000
to take your place

01:37:41.000 --> 01:37:43.240
so we've got a lot of questions coming in

01:37:43.240 --> 01:37:44.120
we'll do our best

01:37:44.120 --> 01:37:47.560
and then maybe

01:37:47.560 --> 01:37:50.780
as you were launched

01:37:50.780 --> 01:37:52.560
and you have the microphone in your hand

01:37:52.560 --> 01:38:04.753
Maybe we'll start with you, Claire. All right, Claire. And I got lost. So, it's raining questions. So, when someone asks a

01:38:04.655 --> 01:38:13.702
question, it raises both the question, I imagine, of the sector and, finally, how to choose.

01:38:13.800 --> 01:38:20.560
This must be a huge debate, but someone asked us, if we take the case of catering, is the TDFN financially interesting?

01:38:20.560 --> 01:38:24.780
It's a broad question, but it does raise a number of criteria.

01:38:24.780 --> 01:38:33.060
It's difficult to answer by field of activity, because it depends on the specific case.

01:38:33.060 --> 01:38:40.700
The best way to find out if this is the right way to go is to make an estimate, or a costed simulation.

01:38:43.260 --> 01:38:50.520
Honestly, I think that in the catering sector, the majority of taxable persons tend to use the effective method.

01:38:50.520 --> 01:38:58.180
All right, then. We've had several questions about the Covid and its aftermath.

01:38:58.180 --> 01:39:05.160
I'll take the first one. At Covid, should RHT revenues and or state subsidies be considered,

01:39:05.160 --> 01:39:10.680
this question of VAT, as a percentage on expenses subject to VAT or on all expenses?

01:39:10.680 --> 01:39:21.459
I don't know who would like to reply. Naomi, Olivier, Olivier. Yes, so the particularity during Covid was that the subsidies

01:39:21.373 --> 01:39:29.414
received for these operations were certainly subsidies, but did not impact the VAT correction.

01:39:29.500 --> 01:39:38.028
If I'm not mistaken, this means that there was a subsidy from the public authorities on this particularity or during this period, but

01:39:37.965 --> 01:39:43.777
which, contrary to what I said in the various examples, did not generate any VAT correction.

01:39:43.840 --> 01:39:49.622
Here too, it was probably a political decision to say we're willing to help people, but if we take left pocket, right

01:39:49.573 --> 01:39:52.731
pocket, then reap the other side, it might be a bit frowned upon.

01:39:53.060 --> 01:40:00.877
So I think there was a political desire to say we'll help. But if we help on one side, we're not going to take them back on the other. So,

01:40:00.821 --> 01:40:06.404
during this period, for these subsidies, there was no correction necessary from a VAT point of view.

01:40:06.460 --> 01:40:16.333
Thank you. Thank you very much. A question for Naomi. Do we pay Swiss VAT if we import from the European Union to re-export

01:40:16.254 --> 01:40:20.361
to the European Union without transforming the good?

01:40:20.440 --> 01:40:32.720
Do we pay Swiss VAT if we import from the EU and re-export to the EU without transforming the goods?

01:40:32.720 --> 01:40:33.640
In fact, we go back and forth.

01:40:33.640 --> 01:40:45.620
In principle, as you said, you pay VAT on the import, which you can reclaim as part of your business, and then export your goods.

01:40:46.200 --> 01:40:53.480
One way of avoiding this is to import the goods into Switzerland under a special customs regime.

01:40:53.480 --> 01:40:58.320
which suspends payment of tax on imports.

01:40:58.320 --> 01:41:05.720
For example, temporary admission to Switzerland typically allows goods to be imported into the country,

01:41:05.720 --> 01:41:10.480
as the name suggests, temporarily, for re-export.

01:41:10.480 --> 01:41:15.120
But this is a special procedure that must be applied for when importing the property.

01:41:16.200 --> 01:41:17.880
It must be authorized by customs.

01:41:17.880 --> 01:41:25.080
And then, at the time of export, it's also important to clear the system,

01:41:25.080 --> 01:41:30.220
so you'll need to fill out an import form to place the property under this regime.

01:41:30.220 --> 01:41:34.280
And then to clear the system through customs formalities.

01:41:34.280 --> 01:41:36.100
But otherwise, yes.

01:41:36.100 --> 01:41:40.080
Exactly. The next best thing...

01:41:40.080 --> 01:41:50.147
Quick aside, be careful, because in this kind of situation, it can be caricatured a little, yes, but the good has to come to

01:41:50.067 --> 01:41:55.740
Switzerland because it has to go back, we can't do it, etc., etc., etc.

01:41:55.820 --> 01:42:04.020
Okay, fine. From a VAT point of view, it works. It works insofar as the invoices are compliant, i.e. there's a foreign supplier

01:42:03.956 --> 01:42:08.596
invoicing Switzerland and then Switzerland invoices someone abroad again.

01:42:09.200 --> 01:42:14.900
After that, the important point is to look at what is contractually envisaged, with whom and how.

01:42:14.900 --> 01:42:22.120
Because if, from a business point of view, we're in phase with invoicing and the transit of goods, which is fine from a VAT point of view,

01:42:22.120 --> 01:42:31.680
what is contractually agreed? If it says in the middle that... That is, if the contract says something other than the flow of goods envisaged,

01:42:32.440 --> 01:42:41.676
This opens up a question mark. If we say, yes, between us, we do say that the goods come back to Switzerland and leave again, but that

01:42:41.541 --> 01:42:50.036
the contract says, the French company, it sells the goods, ex works in France, where these goods will be directly delivered or

01:42:50.036 --> 01:42:55.025
should be directly delivered and sold to someone in Spain or I don't know.

01:42:55.380 --> 01:43:00.578
But as you can see, there's a discrepancy between the actual flow of goods and the contract. I'm not telling you that there's a problem

01:43:00.540 --> 01:43:04.182
from a Swiss VAT point of view, because Swiss VAT, you're going to pay, you're going to recover.

01:43:04.220 --> 01:43:11.321
On the other hand, we don't have a problem at European level, because if the beneficiary, the holder, the economic owner

01:43:11.262 --> 01:43:14.521
or whatever, there's a zone in the middle that approves.

01:43:14.580 --> 01:43:19.400
Mind you, in Switzerland, we manage a little. In Europe, it's pretty much the same thing.

01:43:20.600 --> 01:43:29.137
Thank you for your time. Next question. Does a French company registered for VAT in Switzerland have to declare its

01:43:29.064 --> 01:43:32.347
sales in France for services provided abroad?

01:43:32.420 --> 01:43:36.060
Do any of you want to take up the question?

01:43:36.060 --> 01:43:45.380
From a Swiss TVA point of view, you have the dual entity concept in glissisme.

01:43:45.380 --> 01:43:55.900
This means that, from a Swiss VAT point of view, a Swiss company with a foreign subsidiary or a foreign branch are two different entities.

01:43:55.900 --> 01:43:57.240
So that's the first thing.

01:43:57.240 --> 01:44:04.800
So if you have a VAT number in Switzerland and you yourself have a VAT number in France, from a Swiss VAT point of view, these are two different entities.

01:44:04.800 --> 01:44:15.685
So you're going to have to consider the flows from myself to myself, one way or the other. Now, with regard to the question, does a French

01:44:15.607 --> 01:44:24.082
company with a VAT number in Switzerland have to declare the sales it makes in France in its Swiss VAT decan?

01:44:24.160 --> 01:44:25.680
On services provided abroad.

01:44:25.680 --> 01:44:36.546
The answer is yes, because the principle is that a foreign company is registered in Switzerland. And this foreign company, in its Swiss VAT

01:44:36.469 --> 01:44:45.563
statement, must declare the worldwide activities it carries out, including activities abroad, which will be at 0% VAT.

01:44:45.640 --> 01:44:51.306
Because, of course, they are not carried out in Switzerland, they are abroad. But this entity must declare these activities

01:44:51.261 --> 01:44:54.615
in its VAT statement, even if they are not carried out on Swiss territory.

01:44:54.660 --> 01:45:02.141
I think there's also an impact on the radio TV tax, because as the radio TV tax is calculated on the volume of sales you declare in your

01:45:02.087 --> 01:45:06.966
VAT statement, you could naturally, I'm not saying anything, say, I'm not putting them on.

01:45:07.020 --> 01:45:14.983
That way, I'll pay less radio and TV tax. No, from a VAT point of view, you have to take them into account in your billing. You have to take them into

01:45:14.443 --> 01:45:21.620
account, in particular to be able to charge the correct radio and TV tax, which is calculated on the total sales volume generated by the company's

01:45:23.540 --> 01:45:24.800
Thank you for your time. Question over there.

01:45:24.800 --> 01:45:48.940
But it's the French company registered in Switzerland, with a Swiss VAT number.

01:45:50.820 --> 01:46:00.149
So, whatever. If the French company is registered in Switzerland, from my VAT point of view, it's not the same

01:46:00.065 --> 01:46:03.896
company. We have two different legal entities.

01:46:03.980 --> 01:46:10.360
Now, if it's a French company with a VAT number in Switzerland, it has to declare everything in its VAT accounts.

01:46:10.480 --> 01:46:18.472
Now, if it's a French company registered in Switzerland as a Société française B, or whatever it's called, then it will only

01:46:18.472 --> 01:46:26.214
declare the activities it carries out from Swiss territory. Legally speaking, it's not the same thing. They're two different

01:46:26.214 --> 01:46:30.023
legal entities. It's not the same situation in the two cases.

01:46:31.240 --> 01:46:39.858
All good? Thank you. Now a question for Mrs Hubacher, I imagine. As a fixed-price company, in the event of a non-faulty accident

01:46:39.792 --> 01:46:46.554
reimbursed by the insurance company excluding VAT, can the VAT amount paid to the garage be recovered?

01:46:46.620 --> 01:46:55.273
That's a huge debate, and it's also a huge problem, because insurance companies consider that as soon as they

01:46:55.195 --> 01:46:59.482
reimburse a taxable person, they don't have to pay VAT.

01:46:59.560 --> 01:47:07.800
So, in fact, it compensates for everything except VAT, because the person is a taxpayer.

01:47:07.800 --> 01:47:13.880
And that's actually true when you're a taxable person using the effective method and you recover all the VAT,

01:47:13.880 --> 01:47:19.660
but when you don't recover everything, and especially when you're at the flat rate, you lose it.

01:47:19.660 --> 01:47:27.640
But there's nothing you can do about it, it's a problem of the insurance lobby and politics, but that's just the way it is.

01:47:27.640 --> 01:47:32.840
An amount reimbursed by the insurance company to a self-funded company, it must pay VAT.

01:47:32.840 --> 01:47:38.440
Thank you. Perhaps a question for Mrs Savio.

01:47:38.440 --> 01:47:45.640
Can a Swiss SME reclaim EU VAT on foreign travel or representation expenses?

01:47:45.640 --> 01:47:52.080
Could you just repeat that?

01:47:52.080 --> 01:47:53.680
Of course, I'm happy to repeat it.

01:47:54.460 --> 01:48:01.980
Can a Swiss SME reclaim EU VAT on foreign travel or representation expenses?

01:48:01.980 --> 01:48:09.440
Basically, if she travels abroad, can she reclaim VAT on what she has paid abroad?

01:48:09.440 --> 01:48:24.340
In any case, not in the Swiss statement. If it's VAT paid abroad, in principle, you need to check with the country that taxed the service.

01:48:24.460 --> 01:48:37.975
Then, if there are VAT recovery mechanisms, for example a Swiss company, if it is not a taxable person in a country, let's imagine France, you have

01:48:36.884 --> 01:48:48.469
incurred costs with French VAT, there are refund mechanisms, refund procedures, refund requests that could be made to France under certain

01:48:49.560 --> 01:48:57.774
There are strict conditions. In Switzerland, it's the same. If a foreign company incurs expenses in Switzerland with Swiss VAT, and is

01:48:57.714 --> 01:49:04.660
not subject to VAT, there is also a way, through a refund claim, to recover the VAT it has incurred in Switzerland.

01:49:04.720 --> 01:49:13.720
Once again, in general, this is subject to fairly strict conditions, notably that you cannot be subject to Swiss VAT.

01:49:13.720 --> 01:49:16.740
Merci.

01:49:18.200 --> 01:49:25.440
In addition, of course, in principle, you'll be able to reclaim the foreign VAT you've incurred.

01:49:25.440 --> 01:49:31.740
It could be hotel or restaurant expenses. You have a trade fair, you've been abroad and then you've had costs like that.

01:49:31.740 --> 01:49:39.140
You'll be able to reclaim the VAT. There are certain limits, depending on the country, because we're in Europe.

01:49:39.140 --> 01:49:43.680
So everyone does things a little as they please. But on the whole, there are mechanisms in place, as Noémie was saying, to recover.

01:49:43.800 --> 01:49:48.913
Now, where you have to be careful is when you have goods going from Switzerland to another country, and it's fast, it's

01:49:48.871 --> 01:49:51.238
urgent, it has to go quickly, you can't block the truck.

01:49:51.280 --> 01:50:00.170
Then there's the forwarder or someone who says "Ah, but listen, to go faster, we're going to put you in as an importer in France, we're not going to put the end

01:49:59.749 --> 01:50:07.639
customer in as an importer for reasons X, Y, various and sundry, through ignorance, negligence or because someone said "Yes, put me in as an importer,

01:50:08.060 --> 01:50:13.776
In other words, the Swiss company will become the importer of the merchandise into France, and will have to pay import VAT in France,

01:50:13.733 --> 01:50:17.797
and if you think to yourself, "Oh well, now I'm going to reclaim this VAT", you'll be surprised,

01:50:17.840 --> 01:50:22.582
and then I'm going to ask the French tax authorities to refund me this VAT, it's not going to work as simply as that. Because the

01:50:22.546 --> 01:50:25.804
French tax authorities are going to say to you, "But you've imported, so what's the point?

01:50:25.840 --> 01:50:32.014
Because if you import goods into France, it's not like that for nothing at all. So did you sell it in France, to whom did you

01:50:31.966 --> 01:50:34.932
sell it, shouldn't you be registered for VAT in France, etc.?

01:50:35.260 --> 01:50:43.620
So pay attention to the flow of goods you're planning, especially when you talk to your forwarders or carriers. They often have a tendency to go

01:50:43.506 --> 01:50:51.752
cheap quite easily, but going cheap quite easily, depending on who you're going to put in the box, and the import on the other side, can create a

01:50:51.752 --> 01:50:58.406
few more problems than facilitating what was originally planned. So be careful with your carriers and forwarders too.

01:50:59.100 --> 01:51:05.000
Thank you for your time. Next question. What are the advantages of group taxation if I have several companies?

01:51:05.000 --> 01:51:13.788
So, the advantage of group taxation, the general reason for opting for group taxation, is that all transactions that

01:51:13.713 --> 01:51:17.585
are internal to the VAT group are not subject to it.

01:51:18.260 --> 01:51:27.833
This reduces cash flow within the group. Often, when we choose to do this, it's because we're putting companies within

01:51:27.753 --> 01:51:32.220
the tax group that don't have a very high recovery rate.

01:51:32.300 --> 01:51:42.001
In this way, we avoid having a group company charge VAT that we don't recover. So, in fact, we reduce. The aim, beyond

01:51:41.920 --> 01:51:45.719
cash flow, is to reduce the VAT charge in fine.

01:51:47.120 --> 01:51:54.262
Thank you for your time. Another question. In the case of an invoice for a fee from abroad where the VAT of that country appears,

01:51:54.208 --> 01:51:58.406
do I have to declare the amount including VAT as the acquisition of services?

01:51:58.460 --> 01:52:07.186
No, the foreign VAT amount must be deducted. The entire invoice, except for the foreign VAT amount, must be used to

01:52:07.111 --> 01:52:10.765
calculate Swiss VAT for acquisition tax purposes.

01:52:12.700 --> 01:52:23.000
First recommendation: call your bluff, refuse the invoice and send it back, because in principle, there should be no foreign VAT on this invoice.

01:52:23.000 --> 01:52:29.020
According to the principles we set out earlier, it is the Swiss who must declare his services in his VAT statement.

01:52:29.020 --> 01:52:33.580
Although cases of double taxation do exist, double taxation is not the rule.

01:52:33.580 --> 01:52:39.194
Once again, you're bluffing, even if it's legal, and you send the invoice back, asking for a new one without VAT,

01:52:39.145 --> 01:52:41.391
because you'll have to pay VAT in Switzerland.

01:52:42.240 --> 01:52:44.120
As a general rule, 90% of the time, it passes.

01:52:44.120 --> 01:52:45.380
Then you receive one without VAT.

01:52:45.380 --> 01:52:48.520
Then you create the principle and the mechanism in Switzerland.

01:52:48.520 --> 01:52:50.600
And you won't have to pay French VAT, etc.

01:52:50.600 --> 01:52:51.740
Because if you maintain it,

01:52:51.740 --> 01:52:53.700
we always ask ourselves the question

01:52:53.700 --> 01:52:55.160
will I get it back or not?

01:52:55.160 --> 01:52:56.920
What can I do and what can't I do?

01:52:56.920 --> 01:52:58.780
But on principle, no foreign VAT

01:52:58.780 --> 01:53:00.540
when you receive a bill here in Switzerland.

01:53:00.540 --> 01:53:03.340
Unless it's a restaurant or hotel in Paris

01:53:03.340 --> 01:53:05.040
or whatever, where it's actually legitimate.

01:53:05.040 --> 01:53:07.360
But on service, lawyers, marketing

01:53:07.360 --> 01:53:08.300
or that sort of thing,

01:53:08.720 --> 01:53:10.240
You don't normally have to pay foreign VAT.

01:53:10.240 --> 01:53:14.860
Another question, Ms. Jachar, I think you answered part of it during the presentation.

01:53:14.860 --> 01:53:20.200
Someone asks if we plan to use foreign services in N plus 2.

01:53:20.200 --> 01:53:27.040
Can you change your tax method and for how long?

01:53:27.040 --> 01:53:34.060
So it's a company using the flat-rate method that wants to switch to the effective method, I imagine.

01:53:34.260 --> 01:53:40.216
I'm going to give you a more general answer. Yes, it is possible to change your accounting method. Indeed, if you're

01:53:40.166 --> 01:53:43.750
planning to pay large amounts of tax on acquisitions, it's recommended.

01:53:43.800 --> 01:53:54.130
In principle, you can change method within one year. However, if you switch from the effective method to the flat-rate

01:53:54.044 --> 01:53:58.434
method, there's a 3-year time limit to comply with.

01:53:58.520 --> 01:54:02.940
This is the only condition. Otherwise, you can change your accounting method from one year to the next.

01:54:04.260 --> 01:54:09.360
And if there have been investments, that's fair enough.

01:54:09.360 --> 01:54:15.860
We have another question. It's similar to one that's already been asked.

01:54:15.860 --> 01:54:21.580
Do I have to pay VAT on goods returning to Switzerland when in transit abroad?

01:54:21.580 --> 01:54:24.480
Example of presentation of merchandise or partial sale of a lot.

01:54:24.480 --> 01:54:33.640
So yes, in principle, all goods and deliveries in Switzerland are subject to import tax.

01:54:33.640 --> 01:54:42.107
So, especially as you haven't paid import VAT, in principle, if it's in transit abroad. So, effectively, when it

01:54:42.032 --> 01:54:45.745
comes back to Switzerland, there's the import tax.

01:54:45.820 --> 01:54:55.100
Incidentally, if you have fairground equipment, don't forget the ATA carnet, which allows you to transit through a

01:54:55.020 --> 01:54:59.260
country and return to Switzerland duty- and VAT-free.

01:54:59.340 --> 01:55:07.994
So this is also an opportunity. In addition to the temporary admission that Nomi mentioned earlier, the ATA carnet also allows

01:55:07.926 --> 01:55:13.132
you to transit and cross borders without paying either customs duties or VAT.

01:55:13.340 --> 01:55:21.488
So, of course, if you have 10 pieces going out, all 10 have to come back in. So you have to come back with the same merchandise, in the

01:55:21.429 --> 01:55:26.901
same condition, and so on. But it's a system that also allows you to transit through Europe.

01:55:26.960 --> 01:55:32.748
Thank you for your time. We've got time, I'll just take one last question and then I'll invite you to continue all the

01:55:32.700 --> 01:55:35.112
discussions. I'm sorry, we didn't get to them all.

01:55:35.160 --> 01:55:45.160
So, lastly. If I buy an intellectual service in Portugal delivered by e-mail and resold in Switzerland with VAT, where do I mention this on the form?

01:55:45.160 --> 01:55:58.100
The first step is to acquire a service from abroad. This is the famous example I gave earlier. You'll have to pay 8, or 8.1 on this bill.

01:55:58.100 --> 01:56:08.667
so no Portuguese VAT on this invoice. You receive it in Switzerland, you self-declare 8. Depending on the yellow boxes we talked

01:56:08.585 --> 01:56:17.038
about earlier, you'll get back 8, 4, 6, 2, etc. Ideally, we'll say 8. Ideally, we'll say 8. So that's 0.

01:56:17.460 --> 01:56:25.599
You then own this license in Switzerland. You re-invoice this license in Switzerland at the price you define, with the

01:56:25.531 --> 01:56:29.872
margin you wish to apply. Then you reapply 8.1% on this service.

01:56:31.380 --> 01:56:38.899
Thank you very much. We've come to the end of this rich and dense presentation. I invite you, if you still have

01:56:38.833 --> 01:56:42.094
questions, to continue the discussion afterwards.

01:56:42.160 --> 01:56:52.260
I'd like to thank all today's speakers for sharing their experiences, as well as all the partners who help bring these breakfasts to life.

01:56:52.260 --> 01:57:00.100
So the CCIG, Faire Genève, BDO, Deloitte, EY, KPMG, PWC, Bilan Magazine and Entreprises Romande.

01:57:00.100 --> 01:57:08.241
You'll see that we've got a slido where we invite you, so that's the replay, just so you know that today's conference

01:57:08.172 --> 01:57:12.071
will be available as a replay in the middle of next week.

01:57:12.140 --> 01:57:23.680
We invite you to view it if you wish. You also have access to a slideau, a questionnaire to help you evaluate the day's performance.

01:57:23.680 --> 01:57:37.400
I'd also like to thank the participants. Once again, I'd like to thank OCEI for organizing these breakfasts, and invite you to attend the next one.

01:57:37.400 --> 01:57:42.780
The next meeting will take place on June 27, and will focus on occupational pension schemes and the attractiveness of remuneration packages.

01:57:42.780 --> 01:57:45.480
In this case, it's the Geneva affair.

01:57:45.480 --> 01:57:47.280
Thank you for coming.

01:57:47.280 --> 01:57:49.400
I hope you found the answers you were looking for.

01:57:49.400 --> 01:57:50.860
Have a nice day.