What is needed to get Swiss VAT refunded

Formal requirements

  1. Reciprocity: your country must be mentioned on the list of countries for which Switzerland grants Swiss VAT refund.
  2. Relevant claim period: the Swiss VAT that your company wants to claim back must relate to the previous ended calendar year.
  3. Tax status: your company must proof its tax status in the country in which the company has its business establishment.
  4. Threshold: the amount of Swiss VAT that your company wants to claim back must be in total at least CHF 500.
  5. Forms: the Swiss VAT refund request must be submitted with use of the official documents.
  6. Original documents: the VAT refund request must include all necessary original documents.
  7. Single VAT refund request: your company can apply for VAT refund only once for each applicable year.
  8. Fiscal representative: you need to appoint a Swiss based representative that will file the Swiss VAT refund request.
  9. Deadline: the Swiss VAT refund request must be filed within 6 months after the calendar year has ended.

Requirements of substantial law

  1. Invoice requirements: only invoices that meet the invoice requirements (according to the Swiss VAT regulations) can entitle to refund. These requirements also apply to a.o. restaurant bills, tickets for parking or transport.
  2. VAT due by law: a refund is only possible for Swiss VAT that actually was due.
  3. No VAT liability: only foreign companies that are not registered, nor should be registered, for Swiss VAT purposes, can apply the VAT refund procedure.
  4. No domestic supplies: an important requirement that is often an obstacle is that the foreign company shall not have made supplies in Switzerland during the period for which VAT refund is claimed.

More information about the requirements

Reciprocity

Switzerland acknowledges a right to refund of Swiss VAT only when a country, in which the foreign company has its business establishment, refunds or would refund VAT to Swiss companies. The Swiss tax authorities made a list available in which these countries are named. It is recommended to consult this list also for verifying what limitations for specific countries apply.

Originals

For a successfull VAT refund request at least the original form 1222, the original tax certificate and the original invoices will have to be submitted. Copies of invoices or printed pdf’s (other than genuine electronically submitted invoices that meet the requirements) do not entitle to refund. The invoice list (form 1223) is not signed, for which reason it suffices to file the printout of the completed form. The Swiss tax authorities will return the documents, together with their decision, to the Swiss fiscal representative.

VAT due

In order to be refundable the claimed Swiss VAT must have been due according to the Swiss VAT regulations. Therefore, if a supplier charged Swiss VAT although not due, then the Swiss tax authorities will not grant a refund of that VAT. Regularly suppliers charge Swiss VAT in situations in which the transaction was not subject to Swiss VAT (place of supply outside Switzerland) or subject to a relief (e.g. export supply).

Claim period

The claim period is the previous calendar year. Normally, for determining whether an individual invoice falls within the claim period will be sufficient to verify the invoice date. However, for certain expenditures the period of delivery will be decisive for the assignment of invoices to the correct claim period. Examples are expenditures for exhibition or conference attendance, or accommodation services.

Fiscal representative

The Swiss VAT refund request is submitted through the intermediate Swiss fiscal representative. Namely, form 1222 is not only signed by the foreign company, the Swiss fiscal representative will have to sign the form as well. Communication by or with the Swiss tax authorities is channeled through the fiscal representative.

VAT liability

Often the Swiss VAT refund procedure points a foreign company on the fact that the company has a Swiss VAT liability issue. This can be the case when the business activities of the company that concern Switzerland result in turnover of more than CHF 100’000. Alternatively, a Swiss VAT registration can be a scenario in situations in which a VAT refund is blocked due to domestic supplies in Switzerland during the claim period.

Tax status

A foreign company will have to proof its tax status in connection with the business activities in which scope it made the expenses that were charged with Swiss VAT. To that end the company must provide an original certificate from the authorities of its country in which the company has it business establishment. Such a certificate must be valid for the claim period, or at least not older than one year.

Deadline

The entitlement to Swiss VAT refund is subject to a time limitation. Refund of Swiss VAT relating to the previous calendar year is only possible when the initial VAT refund request has been submitted within six months after the ending of that calendar year. This deadline cannot be extended. Decisive is the date of the postal stamp -although a difference must be made for a VAT refund request that has been sent from abroad (if any).

Domestic supplies

One of the most confusing, not to speak frustrating, conditions for Swiss VAT refund is that the foreign company did not make so-called domestic supplies in Switzerland during the claim period. The concept whether a transaction by a foreign company is considered as a domestic supply is a VAT technical issue. This issue needs to be answered according to the applicable parameters of Swiss VAT, and not by consulting foreign VAT regulations or common use.

Forms

Only the official forms, i.e. form 1222 (VAT refund request form) and form 1223 (invoice list), can be used for submitting the refund request. Specific attention should be paid to question 4 (whether or not domestic supplies have been made), question 5 (description of the company’s business activities) and question 6 (in which scope the expenditures were made).

- Forms / documents -

VAT refund request form

The Swiss VAT refund request is submitted with use of the official form. The form can be downloaded from the website of the Swiss tax authorities.

Invoice list form

The invoices for which Swiss VAT refund is claimed are listed in the official form that is made available by the Swiss tax authorities.

Country list

A foreign company needs to have its business establishment in a country that is mentioned in the list for which Switzerland acknowledges recprocity.

Invoice confirmation form

For invoices that do not fulfill the invoice requirements according to the Swiss VAT regulations the confirmation form will have to be completed.

The decision on the VAT refund request

Time path

A general rule about the length of the period needed by the tax authorities to handle your VAT refund request does not exist. The period may vary from a couple of weeks to several months.
The following parameters may influence the length of period for handling the VAT refund request:

  • the month in which the VAT refund request has been submitted,
  • the claimed VAT amount,
  • the number of invoices to be reviewed,
  • whether the submitted refund request is complete or needs to be supplemented,
  • whether additional information is demanded by the tax authorities, for example copies of contracts or invoices issued to customers (oncharging).

Decision on refund request

In the written decision on the VAT refund request the tax authorities inform the Swiss fiscal representative whether they grant the refund fully or partially, or whether they completely reject the request.

Depending the reasons underlying the rejection the foreign company may have to consider whether it will and what action it can undertake. Such an action could be challenging the rejection by filing an objection.

Experiences show that, in comparison with domestic taxable subjects, foreign companies are less willing to challenge decisions of the tax authorities. With this knowledge in mind this may move the tax authorities to apply administrative practices that are not beneficial for foreign companies. Therefore, foreign companies that are confronted with a rejection of their VAT refund request and question on justified grounds that decision, but do not want to litigate, have only few alternatives. One of such alternatives to consider could be to inform the authorities in their home country that are responsible for trade or tax policy.

Litigation & deadlines

In case a foreign company is not satisfied with the decision of the tax authorities on the VAT refund application, the case can be challenged in three (consecutive) instances.

Objection (to be filed within 30 days)
The objection is filed against the formal decision of the tax authorities in which the decision on the VAT refund application has been laid down; the objection is reviewed by the tax authorities.

Complaint (to be filed within 30 days)
The complaint is filed against the decision of the tax authorities taken on the objection; the complaint is reviewed by the Federal Administrative Court.

Appeal (to be filed within 30 days)
The appeal is filed against the judgment of the Federal Administrative Court; the appeal is reviewed by the Federal Court.

When challenging of decisions in connection with VAT refund requests is considered make sure to obtain consultation about the applicable procedural formalities.

Swiss VAT and distorsion of trade

Distorsion of trade

Swiss VAT is de facto used as an instrument of external trade policy.
Experiences show that the facts or rules are often applied by the tax authorities way beyond “in dubio pro fiscus”. When reviewing VAT refund applications often the authorities make assumptions that are not based on facts. A rejection of Swiss VAT refund not only places the foreign company on a disadvantage compared with Swiss based competitors, it also deepens such existing distorsions when considering the fair treatment with which VAT refund claims of Swiss taxable subjects are dealt by other countries.

Regulations of national law or administrative practices by tax authorities might be harmful for trade when they effect especially or in most cases foreign traders.

Trade barriers complaints

Foreign companies that think that the VAT refund regulation or the administrative practices in that field performed by the Swiss tax authorities impose trade barriers may consider to consult procedures in their home country for reporting them to the competent authorities. By reporting trade barriers the competent authorities are enabled to keep an eye on the application and enforcement of international trade regulations, either with a multilateral character or rather based on bilateral agreements.

Report trade barriers

By informing the competent authorities of your home country about (possible) Swiss trade distortions or other barriers, foreign companies enable their authorities to acquire the needed information about the operation of trade relations with Switzerland and to adopt changes or other measures were needed.

Various countries or trade blocks offer procedures for reporting trade barriers:

Impressum

VAT plus GmbH
Roschstrasse 1A
3007 Bern
Switzerland
office@vatplus.ch
Trade register: CHE-110.231.814
www.vatplus.ch

Disclaimer

The information on this website is of general nature only and cannot be regarded as advice, nor shall be used as main or sole basis for acts.