Hello everyone,
A friend has a Swiss company. He needs to hire a consultant to do some work from the UK for one of his UK clients.
His accountant said that he could sign a consultancy agreement but to include a VAT for "import of services."
The accountant didn't explain how to do it, but it sounds like my friend has to pay an additional charge to "import" consultancy services from the UK?
Has anyone dealt with a similar situation??
Many thanks!

To answer the subject question, easiest would be to have a Swiss company to UK company contract. i.e. the UK worker has a Ltd company.

It used to be, but when I was doing work for a German company, that from the UK you'd not include VAT but rather the VAT fell on the client.The client would pay the VAT speparately. The UK invoices contained no VAT.



These days there are special rules for *some* electronic services. Best to google it.

If both the UK and Germany were in the EU single market then, that's irrelevant. Those rules do not cover consultancy nor bespoke programming on the clients system. At least, that was the case not very many years ago.

UK consultant invoices UK client, with VAT (assuming the UK consultant or his company is VAT registered). E.g. £10000 + £2000
Your friend invoices UK consultant, no MWST. £10000 (or whatever in CHF). That's pretty sure, unless the rules have changed in the three years since I last did it.

If your friend insists on invoicing the UK client directly. then:
Friend invoices UK client.
UK consultant invoices friend's company.
I've no idea what the VAT rules are for that. Maybe again, since the invoices are (currently) non-EU to EU.

__________________
Down with racism. Long live miscegenation!

A Swiss company purchasing services from abroad, e.g., consulting services, needs to declare a service purchase VAT as the recipient of the services under the reverse-charge mechanism. This service purchase tax is called Bezugsteuer in German or Impôt sur les acquisitions in French.



To the extent that the Swiss company is registered for VAT under the effective method, the VAT amount is added and then subtracted on the VAT filing so it is a zero-sum activity.

Reverse charge. Yes that was the term I was looking for.

Is that the case even if you're on one of the flat rates? (Pauschal).

The simplified sales tax method (Saldosteuersatzmethode) does not allow input VAT to be deducted. As such, the purchase tax (Bezugsteuer) on imported services cannot be deducted.

THANK YOU all for your replies - very much appreciated!

This may be of some help:


https://www.estv.admin.ch/estv/en/ho...ertsteuer.html


Otherwise I'd suggest calling the Swiss VAT office and pose the question direct to them. They are very helpful.


Not quite the same, but we use a South African web master for a Swiss registered website, and he does not charge VAT to us, nor do we pay any Swiss VAT on his services.

I'm not a VAT expert but be aware there have been changes to VAT law in Switzerland in 2018 and 2019, so the law is no longer quite the same as "a few years ago".

This is especially so once turnover/values exceed 100k annually in CHF.

Professional advice is always recommended and usually beneficial compared to potential penalties. (which can double the usual liability)