Changes to Switzerland’s value-added tax rules will come into effect from January 1, 2015, through changes to the Value-Added Tax Ordinance.

In changes approved in November, foreign companies will be liable to register and account for VAT on supplies made in Switzerland if their turnover in Switzerland amounts to at least CHF100,000 (USD103,600). This change targets foreign companies that carry out work in the construction and construction-related sector in Switzerland, and is intended to level the playing field for domestic companies.

The rule, contained in Cassis motion (12.4197), will apply until the Value Added Tax Act is amended to add this change. The amendment to the Act would subject domestic and foreign companies to tax from the first franc of turnover in Switzerland if their worldwide turnover amounts to more than CHF100,000, and the rules would apply to a broader range of business sectors.

A second change deletes Article 16, paragraph 3 of the Value Added Tax Ordinance, which excludes group taxation for occupational benefits schemes in all cases. This provision had been included in the Ordinance because joint and several liability among group members for the VAT owed was inconsistent with occupational benefits provision law, and in particular the requirement that the assets of occupational benefits schemes must be beyond the reach of third parties. However, the Federal Supreme Court ruled that the categorical exclusion was unlawful. With the deletion, occupational benefits schemes will no longer be excluded from group taxation as a matter of principle.