Switzerland

On 1 January 2025, new VAT rules for e-commerce will come into force in Switzerland. These rules, which stem from a 2023 tax law revision, designate online marketplaces as "deemed suppliers" for most goods sold on their platforms. This means that the platform will be responsible for collecting and remitting VAT on these sales. Key aspects of the new rules: - Scope: The rules apply primarily to platforms that facilitate the sale of goods within Switzerland. Platforms facilitating the supply of services (e.g. passenger transport, accommodation) are generally excluded, as is the rental or leasing of goods. - Deemed supplier status:

• Platforms are generally deemed to be "deemed suppliers" of goods sold on their platform.
• Platforms can avoid deemed supplier status if they meet certain conditions, such as

• • Not being directly involved in the ordering process.
  • Not generating revenue directly related to the transaction.
  • Only providing payment processing.
  • Only provide advertising space.
  • Providing advertising services only.
  • Only refers buyers to other platforms.

VAT registration:

• Platforms must register for VAT if they facilitate more than CHF 100,000 in annual sales of small consignments.
• Voluntary VAT registration is available, allowing platforms to

• • Act as the importer of record.
  • Pay, reclaim or defer import VAT on high-value shipments.
  • Charge Swiss VAT on all sales to Swiss customers.

VAT liability:

• Platforms are responsible for collecting Swiss VAT on the sale price of all goods sold on their platform, including both low-value and high-value shipments.
• The sale from the merchant to the platform is zero-rated.

Invoicing

• Platforms must issue invoices for all goods sold, including Swiss VAT.
• Merchants should not include Swiss VAT on their invoices.

Import VAT:

• Import VAT is usually charged on high-value shipments.
• The "remittance procedure" allows platforms to defer payment of import VAT.
• Platforms are usually the importer of record.

Compliance and penalties

Platforms must comply with these regulations to avoid penalties, which can include fines, import bans and even the destruction of shipments.

Important considerations

• High-value shipments: The threshold for "high-value shipments" that trigger import VAT needs to be clearly defined.
• Cross-border trade: The impact of these rules on cross-border e-commerce within the EU should be further analyzed.
• Platform-merchant cooperation: Effective communication and cooperation between platforms and merchants is crucial for the successful implementation of these rules.

Import VAT will continue to be levied only on high value shipments. However, under the new platform taxation rules, sales by VAT-registered platforms facilitating the sale of goods will be subject to local VAT by the platform on both low and high-value shipments. The tax authorities will be empowered to impose administrative sanctions on platforms that make supplies on Swiss territory but either fail to register as a taxable person or fail to only partially, or only partially comply, with their reporting or payment obligations. Administrative sanctions include an import ban on all shipments originating from the platform, the destruction of shipments at the border without compensation and the publication of a blacklist of non-compliant platforms.