The exemption from the liability to RTV fees for foreign VAT-registered companies is good news, but other stricter VAT procedures still affect foreign companies.
RTV corporate fee
The amendment of the Radio and TV (RTV) law in Switzerland changes the fee collection for public-licenced radio and TV stations from a device-dependent to a device-independent method. An annual RTV corporate fee of up to a maximum of CHF39’000 will be payable for any business that is VAT-registered and exceeding the relevant annual global turnover. The amendment was affecting also foreign VAT-registered companies, which are not physically present in Switzerland. KPMG and other stakeholders have questioned this interpretation of the amended law. On 29.08.2018, the Federal Administration of Communication (COCOM) has issued an Explanatory Report about the amended RTV provisions. It clearly specifies that VAT-registered companies without a domicile or a permanent establishment in Switzerland are not liable to the RTV corporate fee, since this would not be in line with international law and with the international contractual obligations of Switzerland.
Following on from this, the Federal Tax Administration (FTA) communicated on 30.08.2018 that foreign companies without a domicile or a permanent establishment in Switzerland, which are listed in the Register of Taxable Persons (VAT registered), are not subject to the RTV corporate fee.
Declaration of global turnover
The amendment of the VAT Act, in force since 01.01.2018, leads to additional VAT declaration duties for foreign companies. As of now, they are required to report their global turnover in the VAT returns, whereas until 31.12.2017 only the domestic turnover was needed.
However, the FTA provides a simplified method for the declaration of the global turnover. During the financial year, foreign companies may prepare the quarterly VAT returns as until now, i.e. based on Swiss domestic turnovers. The global turnover may be reported at a later stage with an annual rectification VAT return.
There are still some open issues, e.g.:
- Foreign companies that in addition to taxable turnover also have non-taxable turnover are excluded from applying the simplified method.
- The cumbersome identification and annual declaration of foreign turnover that is tax-exempt without credit under Swiss law (e.g. supplies related to insurance, to money and to immovable for dwelling).
KPMG would be pleased to support you with the setting-up of an operational process to stream line the preparation of these annual declarations of global turnover.