In Switzerland, the VAT rates will be increased on 1 January 2024 (the standard rate of 7.7% will be increased to 8.1%).
In VAT Info 19, the Swiss Federal VAT Administration ("FTA") has set out the relevant practice for the increase in Swiss VAT rates on 1 January 2024, in particular clarifying the delimitation (old/new rates).
The applicable tax rate is determined neither by the date of invoicing nor by the date of payment, but by the date of performance of the supply. The old rates will apply to supplies made up to 31 December 2023. Supplies made from 1 January 2024 will be subject to the new rates. Where supplies are subject to both the old and the new rates by virtue of the period over which they are made and are listed on the same invoice, the date or period over which the supply is made and the proportion of the amount attributable to each must be shown separately. If this is not the case, the entire invoiced supply must be invoiced at the new rates (VAT Info 19, section 2.1).
In practice, the increase in the VAT rate leads to numerous tasks for VAT payers.
For larger (international) companies in particular, the necessary adjustments to ERP systems are often more complex and time-consuming than expected. It is therefore advisable to draw up an action plan at an early stage in order to ensure that the systems are adapted to the new VAT rates in good time and that correct invoicing is carried out. Possible steps include
Request IT budget (if needed)
Define new VAT codes (e.g. according to group policy)
IT implementation of the new VAT codes
Test the new codes
In addition to the IT issues, there are a number of other tasks that will be required. For example
Checking the VAT details displayed on customer receipts
All-in fees: Verification/calculation of formulas
Companies with "taxe occulte" (non-recoverable input tax): Check margin calculations and adjust prices if necessary
Turnover from recurring payments such as leases/rental contracts for which taxation is opted/service subscriptions, etc.: ensure communication with customers, correct disclosure of VAT details, increase in payment, etc.
Discounts, sales rebates, returns, etc.: ensuring the correct VAT rates are applied
Income from the sale of vouchers: Review the specifics of when the tax liability arises and determine the correct VAT rate.
Advance payments and invoices: Check whether all or part of the supply will take place after 31 December 2023 and ensure that the relevant supplies are charged at the new rate.
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