Switzerland: Final VAT guidelines on platform rules for goods

The Swiss tax authorities (FTA) published final guidelines on January 28, 2025, regarding the platform rules for goods, which became effective on January 1, 2025. The final version of the guidelines follows consultations on draft guidelines in the second half of 2024. Read TaxNewsFlash

New rules for platforms

Under the new Article 20a of the Swiss Value Added Tax (VAT) Act, a person (whether Swiss or foreign) who facilitates the sale of a good through an electronic interface will be treated, for VAT purposes, as the seller of the good. This means they are considered to have purchased the goods from the original seller and resold them to the customer. However, sellers have a subsidiary liability in case a platform is not complying with the rules.

The term "facilitate" involves the use of an electronic interface to connect a buyer and a seller to conclude a sale using this interface. For a platform to be deemed as facilitating a transaction, certain indicators must be present, such as ownership of customer data, managing the communication of the order, and the ability to process payments or refunds. Additionally, if the transaction includes physical aspects like the delivery of goods, the platform must not appear outwardly as a simple tool provider but needs to be involved actively in the transaction to be considered under this article.

Platforms that are not involved, either directly or indirectly, in the proceed of ordering goods or who do not generate gross receipts related to the transactions are not caught by the new provision. In this respect, the guidance states that a platform performing the following activities is not caught by the new rules: (1) neither directly nor indirectly involved in the ordering process; (2) does not generate sales that are directly related to the business (3) the processing of payment in relation to the sale of goods; (4) the placement of adverts for goods; (5) the advertising of the goods through advertising services; and/or (6) the redirecting or transferring of customers to other electronic interfaces where the goods are offered for sale.

B2C vs. B2B status of the seller and buyer

The Swiss VAT law does not distinguish between sales of goods made to taxable and non-taxable persons. Hence, platforms do not need to identify whether the transactions they facilitate are for customers who are taxable persons.

In addition, it is assumed that the seller is conducting a business activity, primarily because the gross receipts threshold required to be exempt from tax liability on Swiss territory is relatively high. Therefore, it is impractical for platforms to assess whether an individual seller is conducting a business activity based on factors like income sources, appearance, profitability, or permanence.

As a consequence, the platform rules include business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer (C2C), and consumer-to-business (C2B) sales. If the underlying seller is a business already liable for VAT, additional options are available to the platforms and sellers.

Transactions subject to the new rules

All sales of goods (domestic and imported) are covered. As the new rules create a deemed buy-sell the VAT treatment will depend on whether the transaction is a domestic or international sale:

• Domestic: the seller is performing a zero-rated deemed sale to the platform who itself perform a taxable deemed sale to the customer.
• International: while the seller is also performing a deemed zero-rated sale to the platform, the platform is, in principle, deemed to be the importer of record of the goods and subsequently performs a domestic taxable sale to the customer. Note that Switzerland has not repealed the small consignment exemption. In this respect, the platform liability is only triggered if the total value of small consignments exceeds CHF 100,000 per year or the platform benefits from a declaration of subordination (subjects itself under the Swiss rules). Moreover, as the platform is the importer or record, it will be able to reclaim the import VAT through its VAT return or apply the import VAT deferment procedure. Finally, the guidance clarifies that in certain circumstances the seller may also be the importer of record, in which case the sales transaction through a platform should be considered a domestic sale.

Services facilitated by platforms are treated differently. Platforms facilitating sales of services are not affected by the platform rules. However, these platforms still have obligations to provide information about the transactions they facilitate upon request of the FTA.

Registration obligation

A platform is required to register for VAT if (1) it generates annual gross receipts from non-exempt transactions amounting to CHF 100,000, and (2) it has its registered office on Swiss territory (including Switzerland and Liechtenstein) or facilitates transactions on Swiss territory. In this respect, a transaction is considered made in the Swiss territory if (1) the goods are sold from the Swiss territory or (2) the platform facilitates sales of small consignments imported into Swiss territory valued above CHF 100,000 per year.

As a simplification, the guidance clarifies that platforms facilitating the sale of domestic sales and of imported goods, may apply VAT on all sales, thus disregarding the CHF 100,000 annual threshold for small consignments.

Invoicing obligation

For VAT purposes, platforms should issue invoices including specific details such as the date of the sale contract, nature and scope of the transaction, identities of the seller and customer, delivery address in Switzerland, price paid in Swiss francs, and the VAT amount charged, broken down by rate.

In addition, to avoid confusions with civil obligations of the parties, platforms should add a statement on the invoice indicating VAT was charged by the platform under Article 20a of the VAT Act, along with the platform's name and VAT number.

Information reporting requirement

In the newly published guidance, the information reporting requirement was adjusted. Thus, all platforms facilitating direct online interactions for goods or services (including those not subject to the new platform rules) must only upon request provide information to the FTA. The platforms must keep a register of the following: (1) seller’s contact details (name, postal address and e-mail address or website); (2) gross receipts generated on the platform (before deduction of the fees charged by the platform operator); (3) as far as possible: the type of services offered; (4) as far as possible: the name, postal address and e-mail address of the buyer.

These records must be maintained for ten years from the end of the transaction year.

VAT audits

The FTA may carry out VAT audits on the platform operators. Supplies facilitated under Article 20a of the VAT Act must be documented by the platform operator. In particular, the following information can be used for this purpose: (1) The type of goods sold; (2) the consideration, stating the currency; (3) any subsequent increases or decreases in the consideration; (4) the VAT rate applied; (5) the amount of VAT due in Swiss francs; (6) the date and amount of payments received; (7) any evidence of a possible return of the goods or of possible reductions in the consideration.

For more information, contact a KPMG tax professional:

Anna Junghardt |annajunghardt@kpmg.com

Philippe Stephanny | philippestephanny@kpmg.com