Switzerland's New E-commerce VAT Regulations

Starting January 1, 2025, new VAT rules in Switzerland will affect electronic platforms that help sellers and buyers make deals. Here's a simple breakdown:

1. Platform Operators as Suppliers:

If you run an electronic platform that connects sellers with buyers, you're now considered the supplier to the buyer. This creates two transactions for VAT purposes:

One between the original seller and your platform.
Another between your platform and the buyer.

2. Tax Exemption for First Transaction:

The transaction between the seller and your platform is tax-exempt. In your VAT return, report this under item 220 (supplies exempt from tax).

With the platform's consent, you can choose to tax this first transaction voluntarily.
If you're a seller using simplified tax methods, you can switch to the effective reporting method if you meet certain conditions.

3. Importing Goods:

If goods are imported into Switzerland, the first transaction (seller to platform) is considered to take place abroad. Sellers should report these as "supplies abroad" in their VAT return under item 221.

4. Platform Operators' Location:

Whether your platform is based in Switzerland or abroad, these VAT rules apply to you. These cross-border tax policies reflect a larger shift in regulatory thinking, similar to structural changes outlined in the Swiss corporate amendments, which also increase compliance demands across jurisdictions.

5. Invoicing Details:

If the original seller issues an invoice to the buyer that includes VAT, it must mention the platform operator and state that the transaction falls under Article 20a of the VAT Act. For example: "VAT at a rate of 8.1% reported to the FTA in accordance with Article 20a of the VAT Act by [platform operator's name and VAT number]."

6. Information Sharing:

Unlike earlier drafts, from January 1, 2025, platform operators aren't required to automatically provide information to the Federal Tax Administration (FTA). Instead, you'll need to share information only if the FTA requests it.

7. Reconciliation Not Required:

Previously, platforms had to match sales data with import tax declarations. This is no longer required when goods are imported. The removal of this reconciliation mirrors simplification efforts seen in other regulated sectors such as the regulated DLT platform, where streamlined reporting improves operational efficiency.

When Do These Rules Apply?

These rules apply to contracts made on your platform from January 1, 2025. Contracts made before this date aren't affected, even if the goods are delivered after January 1, 2025. Still, platform operators should assess automated compliance mechanisms, taking cues from risk oversight principles seen in FINMA's AI guidance, especially where technology mediates taxable transactions.

If you supply goods to Switzerland that were previously exempt from import tax due to low tax amounts (small consignments), and you've made at least CHF 100,000 from these in the past 12 months, your tax obligations start on January 1, 2025.

For more details, refer to the Federal Tax Administration's guidelines on electronic platforms.