Dear all,

afraid it is me again, with yet another 'newbie' question regarding setting up a swiss business.

Well, I have now registered my company with the 'Registre du commerce du canton de vaud' and have their letter of confirmation in front of me. I can now register myself with Swiss VAT. But should I wait a while before doing so? Am I silly in thinking that I do not pay VAT if I earn less than ~X swiss francs per year, but by registering, I waiver this benefit?

Probably a very silly question.

Thanks in advance,
Andy.

Hi

I think you need to pay only when you cross a threshold (70K per annum ** to be confirmed), and do not need to register before.

You could call following number to confirm for yourself

Roman Kohler
Expert de douane
TVA sur les importations en général (allemand, français, anglais)
Téléphone +41 (0)31 322 65 48

or visit this website

http://www.ezv.admin.ch/zollinfo_fir...x.html?lang=en

Thanks Newbee. Very very useful reply.

I rang up that person. Here's a summary:
-you only pay tax after 100,000 chf.
-it is worth registering ASAP as you can claim back tax on all the goods you buy for the company.

Mission accomplished! I register now.
Cheers!

Dear all,

I've decided to not register just yet as I need as swiss bank account.

But in the mean time, may I ask, is it worth selecting the 'simplified VAT method'? See below excerpt from the website where you register for VAT.

Also, see the section below that. Is it true you can select your own tax rate??

Thanks so much for any advice! So perplexing this!
Andy.




simplified VAT method
Veuillez faire un choix concernant le décompte simplifié
L'application de la méthode des taux de la dette fiscale nette permet de simplifier de façon significative les travaux administratifs en rapport avec la comptabilité et les décomptes TVA. Le calcul de l'impôt préalable est supprimé et la TVA est décomptée semestriellement au lieu de trimestriellement. Les assujettis dont le chiffre d'affaires annuel déterminant provenant de prestations imposables n'excède pas 5 millions de francs (TVA comprise) et dont la dette fiscale, calculée au taux de la dette fiscale nette déterminant pour eux, ne se monte pas à plus de 100 000 francs par an, peuvent établir leur décompte TVA au moyen de la méthode des taux de la dette fiscale nette. Pour des informations détaillées voir Info TVA 12.
Souhaitez-vous appliquer la méthode de décompte simplifiée des taux de la dette fiscale nette (art. 37 LTVA)?

set my own tax rate
Veuillez faire un choix concernant le mode de décompte selon les contre-prestations reçues
Le mode de décompte standard est celui établi sur la base des contre-prestations convenues (art. 39 LTVA). Lorsque le décompte de l'impôt est établi selon les contre-prestations convenues, l'assujetti doit déclarer le chiffre d'affaires dans la période de décompte dans laquelle il a facturé ses prestations à ses clients. Lorsque le décompte est établi selon les contre-prestations reçues, la dette d'impôt naît en revanche au moment où l'assujetti reçoit effectivement la contre-prestation (art. 40 LTVA). Le décompte selon les contre-prestations reçues doit être demandé à l'AFC.
Souhaitez-vous établir les décomptes selon les contre-prestations reçues?

It was confusing for me too.

You can register yourself by choice -you HAVE TO is your turn over is more then 100,000 annually.

They don't like that you register yourself voluntary!
Because if not, all your warehouse goods you buy at first will have VAT-tax on it (non-refundable), later, when you're big, you pay the tax again on the goods for sale - though tax already paid. I think you get the picture?

BUT, if you work for other Swiss companies its better if you have a VAT number to be recognized as business, the GmbH or AG alone fairly often is not enough for them.

Yes, you can choose the tax, but they will correct you depending on business. It's kind of formula they use. (Don't worry, they will never loose)

In general, if you call them they are friendly and really try to help. in opposite to other countries they don't think that you're a criminal or offender until proof otherwise.

to AnyTWoods: Goods you buy for own use you need to pay VAT. there is a own category on the tax declaration for goods consumed/used by yourself. However, if you i.e an IT company you could use a printer from the warehouse for test purposes as it is still "for sale"... Who said that???

G.

Thanks Caribeangeorge

Sorry, I don't quite get this:

They would not like me (if I voluntarily registered) as I can:
-claim back the money for goods I purchase for my business (e.g. computer hardware) as I earn <100,000chf.
-my customers pay VAT which does not go to the government as I earn <100,000 chf.

Thanks,
Andy.

depends who your customers are.

if they are swiss VAT registered and can reclaim the VAT then it is worth registering since you can pass on the VAT cost to them and they don't care about it. if you are selling to end consumers, then it will eat into your profit margins.

conversely, if your business has a high capex/input costs, then it might be worth registering to reclaim input VAT on these costs. only by weighing up the factors can you make a judgement.

don't forget it is also an administrative hassle.

If you are VAT registered, and you sell to non-vat registered entities, then either the VAT cuts into your profit margin, or you sell your widgets for more. VAT registered entities don't care that you charge VAT as they pass it on to their customers.

Assuming an invoice of invoice 1'000CHF, add the VAT at 8% - 1'080CHF. If you're on normal VAT accounting, then you hand over 80CHF to the VAT office, but you can offset VAT you've been charged on purchases.

If you're on simplified, you hand over (assuming the rate for your type of company is 6% - the exact amount depends on the nature of your business ) 6% of 1080 = 64.80. You gain CHF15.20., but you can't offset VAT on purchases.

If you're on simplified VAT you also save on accountancy fees and/or time, as you don't have to keep VAT records.

If you're customers are outside Switzerland, you don't charge VAT regardless.

Thanks so much for your patience with me, and your answers

Everything is almost clear to me. But may clarify my position just to be sure.

I will sell my own software 99% of time to customers outside of switzerland. These customers do not get charged vat (thanks for telling me ). Am i right in thinking that when i invoice these customers (mostly consisting of universities and other businesses), they thus require no vat number for my business?

Demonstrating my 'greenness' in business matters, it is with my bank i am able to generate and send invoices out to customers through?

Thanks so much. You guys are great! Andy.

OK "Greenhorn"

Just keep one thing in mind:
If you travel abroad, lets say to the University of Munich, that uses your software and you bill them for the time, you have to add German VAT on you bill and inform the Germans that you have some tax collected and desperately want to pay to the German Government.

If you go with the software, then the (German) VAT has do be added to the bill - work and goods.

The VAT is due on the place where you work and where your work remains.

G.

Go and get proper advise from a professional, it will be cheaper in the long run!

It is well over 5 years ago since I did this kind of thing, but at the time it was the most convoluted process I ever came a cross! First you did not charge the customer VAT that part was true, but at the same time you had to pay over some kind of imputed VAT amount on the basis of these sales and then claim it back again!

Good luck with the business,

Jim2007

Great post, thanks!