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Old 15.04.2009, 14:22
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Einzelfirma VAT? VAT for product resale?

I'm trying to understand VAT and taxes for a small Einzelfirma in Switzerland.

Let's say I'm an Einzelfirma with an annual income around 40K CHF. I provide technical support (both in person and remotely) for Mac users, some in Switzerland, some outside of Switzerland (mostly in the US).

Most of my income is for my time (90CHF/hr), but I occasionally resell products to customers, for example I will replace a hard disk in a customer's computer by buying a new hard disk from a local retail store, reselling the disk to the customer at 10% over what I paid, and charging them for my time to do the installation.

Do I need to pay VAT for my service income for Swiss customers? What about foreign customers (point of service is in another country)? Do I need to pay VAT on the 10% profit I make from reselling products? How do I pay VAT? (the forum search doesn't seem to find anything for "VAT" :-/)

Is tax filing for an Einzelfirma a relatively straightforward process or will I need an accountant?
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Old 24.04.2009, 20:53
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Re: Einzelfirma VAT? VAT for product resale?

Hi Axxxxe

I had an "Einzelfirma" for several years before opening a "GmbH". The tax authorities require a minimum sales volume before giving you a VAT ("Mehrwertsteuer" or MwSt) number and given your annual income primarily through an hourly charge and not through material sales, you won't qualify. That means you pay MwSt when you buy materials for resale, but you cannot charge MwSt to your customers when you resell those goods. That only means that your prices cannot explicitly include MwSt, i.e. you cannot say on your bills that MwSt is charged or included, no matter how you've calculated your price.

Tax filing is fairly simple - anything that is profit in your bookkeeping goes into your private tax return as income. That said, I did have somebody check my books and complete the tax return portion for this income so that I wouldn't have any tax problems. You can buy this service reasonably priced if you've done your bookkeeping properly and they only have to check it. If you don't keep proper books, that's another story.

An Einzelfirma in Switzerland is not at all complicated to open or report. That's positive. :-)

But please take my help with a grain of salt because I am not an accountant, just a normal business owner who may or may not get things right all of the time!

Laurie
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Old 24.04.2009, 21:18
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Re: Einzelfirma VAT? VAT for product resale?

My first bit of advice is to hire an accountant (Treuhander). They will be
the best source of answers to all your questions above and more. I
have paid CHF 2500 or less per year, depending on the amount of ins
and outs to be booked. Plus, the numerous telephone calls and e-mails
answered included.

I am an Einzelfirma (single signature private company). I do have a
MwSt/VAT number. Here is the breakdown:

When I order hardware, I pay 7.6% MwSt. on my purchase price. This is
"pre-paid tax". When I set the sell price (for hardware sales) the MwSt.
is included. In the end, I pay* 7.6% MwSt. on the profit made from that
hardware sale.

On services, the MwSt is not included. Thus the term: "zzgl. MwSt."
which means VAT will be added on top of the given price. I pay* this
7.6% of the total invoiced price.

Now, given the two * taxes collected in my account from various
services and sales, minus the pre-paid tax from my purchases and
receipts, this is the MwSt. due/credit.

If the amount collected is more than pre-paid, I pay this to the MwSt.
office in Bern - respectively, if I paid more pre-paid than collected, then I
receive the amount credited to my account. I do this on a quarterly
basis.

Also, if you are close to the magic number to get a Mwst number and
can loosely prove that you could make more if you had a MwSt. number.
They will give you one, backdated to the beginning of the year.
However, you must reach that magic number that year or they may take
the MwSt. number away the following year. If I am not mistaken, that
magic number is around 80k.

One last comment, the pre-paid tax does not apply to purchases for
your own use. Only for purchases for items sold or purchases of
material to perform the services ordered.

Good luck!
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