On Aug. 21, SWI Tax said Federal Council adopted partial revision.
SWI Tax announced the Federal Council adopted a partial revision of VAT Ordinance.
Published explanations of amendments and report on results of earlier consultation.
Follows SWI Tax May 2024 noted tax changes' application 2025-2028, see #213303.
Follows SWI PRL approved partial revision of VAT Act (MWSTG) in 2023, see #187304.
Overview
At meeting on Aug. 21, 2024, Federal Council adopted VAT ordinance partial revision.
It has implementing provisions for amended VAT Act and independent adjustments.
In particular, concerning balance and flat-rate tax method and the portal requirement.
At the same time, decided that revised VAT Act will come into force on Jan. 1, 2025.
Key Aspects
VAT Act passed by Federal Council on Jun. 16, 2023 also results in adjustments to VAT Ordinance, in areas of platform taxation, annual accounting, subsidies, cooperation.
It also contains further adjustments independent of partial revision, in particular re balance and flat-rate tax method, group taxation and extension of portal obligation.
With voluntary balance and flat-rate tax method (SSS and PSS), input tax burden customary in industry is taken into account as flat rate.
VAT paid by taxpayers on their expenditure (input tax), does not have to be recorded.
I.e. less administrative work; those with below-average input tax burden also benefit.
The current amendment to regulation is intended to reduce tax planning options of SSS and PSS and to place more emphasis on simplified tax accounting.
To avoid primarily financially motivated changes in accounting methods, input tax corrections are now provided for when changing.
Per these corrections, it is possible to switch from PSS accounting method to the effective accounting method and vice versa in a shorter period of time.
In consultation, majority of proposed changes were received positively; report issued.
Other Aspects
Companies that operate in several sectors should be able to apply more than current 2 net tax rates, means they no longer have to estimate in advance which combination of 2 net tax rates applicable to all sectors is the most financially advantageous.
Instead, they can calculate each sector using the corresponding SSS.
Re annual accounting, SSS and PSS, group taxation, electronic portal provided for this purpose by Federal Department of Finance will in the future be used exclusively.
If applications and reports not submitted electronically via designated portal, SWI Tax will reject them and remind taxpayers of their obligation under art 123 revMWSTV.
If portal unavailable for technical reasons there will be no disadvantages for taxpayers.
Effectiveness
The revised VAT Ordinance is in force at same time as amended VAT Act Jan. 1, 2025.
Exception is portal requirement for areas of balance and flat-rate tax method, group taxation, deregistration as taxable person, that will only be introduced on Jan. 1, 2027.
Aug. 2024 SWI GVT Statement
On Aug. 21, 2024, SWI GVT said Federal Council adopted VAT order partial revision.
The revision aims to limit tax planning possibilities offered by net tax debt rate and flat rate methods, and to place greater emphasis on simplified VAT accounting.
It provides for corrections to input tax deduction in event of a change in accounting method, to avoid changes motivated primarily by financial reasons.
Deadlines for switching from flat rate method to effective method, vice versa, shorter.
In addition, companies active in several branches will be able to apply more than 2 net tax debt rates as they will count each activity at the corresponding net tax debt rate.
No longer need to estimate in advance which combination of the 2 rates is better.
In future, taxable persons must use electronic portal of Federal Department of Finance for procedures re annual statement, net tax debt rate, flat-rate methods, group tax.
Reiterates the information on entry into force and application dates (given above).
Oct. 2024 Reminder
On Oct. 14, 2024, SWI Tax reminded of partially revisedVAT Act and VAT ordinance with changes to VAT as of Jan. 1, 2025; practice on selected topics will follow soon.
