VAT on foreign electronic publications

Hello, 

I have a paid subscription to an electronic publication from the US, the provider has not charged me a Swiss VAT. I understand that under a new VAT law from 2018 foreign companies are required to register for VAT in Switzerland, if their worldwide turnover exceeds CHF 100k. The place-of-receipt principle does not apply to electronic services, so from 2018 this provider has to register for Swiss VAT and appoint a local representative. 

As far as I know, the company has a worldwide turnover above CHF 100k threshold but it has very few subscribers in Europe, and perhaps I am the only subscriber in Switzerland. If they choose not to register for VAT in Switzerland as it will make a little business sense, what should I do? Can I still settle the VAT due on my subscription payment as an acquisition tax, even though the place-of-receipt principle does not apply to electronic services? Thanks

Hi there,

As of January 1, 2018, foreign companies are required to pay value added tax (VAT) on VAT-eligible goods and services provided in Switzerland if their worldwide annual revenues from the sale of goods and services which would be subject to VAT in Switzerland equal 100,000 Swiss francs or more. Previously, foreign companies were only liable to pay Swiss VAT if they earned revenues of 100,000 or more from sales in Switzerland alone.

However, as a consumer living in Switzerland, there is no need to take any action whatsoever with regards to paying VAT on foreign goods and services. It is also unlikely that this change will affect your access to electronic publications from foreign publishers.

If you run a business and buy electronic publications or data as part of your business, you can continue to pay acquisition tax on the imported goods and services which are subject to acquisition tax as you have until now. Goods and services which are subject to acquisition tax are not affected by the new VAT rules.

IMPORTANT: moneyland.ch is not a tax advisory service, and this information is provided as is for educational purposes only. If you have complicated questions about taxation in Switzerland, we recommend you consult a qualified tax advisor.

Best regards from Moneyguru

More on this topic:
Basic guide to Swiss acquisition tax
Input tax explained
Value added tax explained