VAT refund – Don't forget to reclaim your Swiss VAT

Non-Swiss businesses without a Swiss VAT registration still have until the end of June 2024 to file their VAT refund claim for Swiss VAT incurred in 2023.

Foreign companies without an establishment or a VAT registration in Switzerland often incur Swiss VAT on business expenses. Such Swiss VAT may for example be incurred on travel and accommodation expenses, on the purchase of goods in Switzerland or on import VAT paid when importing goods into Switzerland. On an annual basis, the total amount of Swiss VAT incurred can add up to a significant amount for the companies.

This Swiss VAT does not necessarily have to be considered as an irrecoverable cost by these companies, as it may be reclaimed from the Swiss tax authorities.

Similar to refund schemes in other VAT jurisdictions (e.g. those in the EU referred to as VAT refunds under the 8th or 13th VAT Directives), companies not established in Switzerland may be able to reclaim Swiss VAT they incurred through a similar VAT refund scheme.

In order to benefit from the Swiss VAT refund regime, certain conditions need to be fulfilled. The main requirements are the following:

• the Swiss VAT was incurred on business expenses in 2023. Such expenses could for example include expenses for hotels, meals, car hire, conferences, training, education, exhibitions/fairs, events or warranty costs, purchase or import of goods etc.
• the company who incurred the Swiss VAT must have its domicile, place of business or permanent establishment abroad.
• the applicant isn’t registered for VAT purposes in Switzerland or Liechtenstein (and isn’t required to be – this especially needs to be ensured if the Swiss VAT incurred relates to the purchase or import of goods).
• a proof of entrepreneurial status issued by the foreign tax authority has to be provided with the application. The proof must be valid for the refund period. 
• the applicant has VAT-compliant invoices or import assessment documents available for the expenses. These documents are to be submitted in original format as part of the VAT refund claim.
• the applicant’s country of domicile grants reciprocal rights for Swiss companies to similarly file a refund claim in that country (if it has a tax comparable to Swiss VAT).
• the accumulated minimum total VAT refund amount is CHF 500 for the full year.
• the applicant must appoint a Switzerland-based fiscal representative in connection with the VAT refund claim.
• the VAT refund application for 2023 has to be submitted using the official forms by 30 June 2024 at the latest (date of postmark). It is important to note that only one application can be submitted per year and that this deadline cannot be extended under any circumstances.

If the above conditions appear to be met at first glance, we recommend companies to check their accounts to determine whether it indeed incurred Swiss VAT on either purchases or imports in 2023 and has the relevant documentation to prove it.

We recommend that you seek assistance for the following actions:

• Checking the requirements for the refund of Swiss VAT and whether the respective invoices/import documents meet the necessary conditions
• Preparation and submission of the required documents. KPMG can act here as your fiscal representative, which is mandatory for companies wishing to benefit from the refund procedure
• Conducting further discussions with the Swiss tax authorities if required
• Verify whether similar VAT recovery opportunities are at hand in other countries and initiate the necessary steps in this respect.

In case you have any further questions on the above or seek further assistance, please do not hesitate to reach out to your KPMG contact or the authors of this blog.