Hi ,

I was wondering if there is any kind of tax laibility if one ie selling the software outside CH, say to a company in US / Canada. The company which is selling is based out of CH and the software is a simple download. The payment is made online.

In this transaction is there any tax laibility on account of Swiss company (it is a GMBH) arising in Canada / USA or here?

Also if an individual is charging service fee to a company outside CH then other than income tax, does it attract any VAT or Service tax laibility?

Thanks a lot in advance..

Hi

you say the selling company is based outside CH. If so tax would be liable in the country it is based. But you also say the company is a Swiss GmbH in which case the sale would be classed as taxable income surely?

What you are talking about here are online sales. They are rather complicated due to different international laws but in any case the following is ***generally*** true.

Income tax liability is due in the country of origin of the sale. ie where the sale is deemed to have occurred as are the legal restrictions and requirements pertaining to the AGBs.

Countries that define a sale as occurring where the customer is based can indeed do that except where there is a proviso on the part of the seller dismissing such claims, which is okay as long as the companies trading relationship does not conflict with trading area(ie NAFTA, EFTA...) obligations

So in the above example the only tax liability of any sort will be income or corporation tax on profits generated here, and payable here. VAT is only charged to customers within Switzerland (excluding duty-free zones) and never on exports.

.. but this part could be more complicated depending on where the service delivered. Some countries require sales tax where the service is delivered in that country with the liability for the sales tax either being with the company delivering the service is located within it's administrative area or with the customer where the company is located outside.