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Switzerland VAT Tax Follow

Overview

Beginning on or shortly after June 1, 2020, Zoom will begin collecting VAT for Switzerland. 

Frequently Asked Questions – Switzerland VAT

What is VAT?

VAT is the abbreviation of Value Added Tax and is in general due when goods and/or services are sold. It applies more or less to all goods and services that are bought and sold for use or consumption in Switzerland.  It is a Consumption Tax because it is borne ultimately by the final consumer.

Who must pay VAT?

Generally, VAT is payable by the supplier who is selling goods or services to its customers, where the VAT is invoiced by the supplier and collected from the customer, and subsequently, the supplier remits the collected VAT to the government.

Note: In case of cross border transactions with services, business customers (B2B) are sometimes required to self-account for local VAT under a so-called "reverse charge rule" or “acquisition VAT” (i.e., the recipient reports local VAT in its local return), if the foreign provider is not VAT registered in Switzerland. Depending on the business customer's activities/recovery ratio, the reported VAT can be reclaimed as input VAT.  In other words, the liability to report local VAT is in that case being shifted from the supplier to the business customer. However, this will as of June 1, 2020 no longer be the case for the services provided by Zoom in Switzerland.

Where does Swiss VAT apply?

VAT generally applies to all taxable supplies made in Switzerland.

What is a VAT ID number?

A VAT number is a unique 9-digit number (which starts with the prefix “CHE” and ends with a suffix MWST (German) or TVA (French) or IVA (Italian)) activated by the Swiss Tax Authorities that identifies a person/entity as registrant for VAT purposes in Switzerland.  The VAT number generally appears on invoices issued by the supplier.

Does Zoom have a VAT number?

Zoom has applied for a VAT registration with the Swiss Tax Authorities.

How is Zoom determining which customers VAT applies to?

Zoom will apply VAT if the location of the “Sold To” contact address entered by the customer is in Switzerland.

Will VAT apply if a Swiss company purchases Zoom for use in a location outside of Switzerland?

If the “Sold To” address is in a location outside of Switzerland, even if the billing address is in Switzerland, VAT will not be charged on the basis that it is assumed that the Zoom product will be for “use” exclusively outside of Switzerland. 

Why did I get a notification email if I am not located in Switzerland?

In order to ensure complete and thorough notification to any of our customers who may be impacted, we sent the notification communication to all customers who had a “Bill To” OR “Sold To” address in Switzerland.

Why is Zoom charging VAT on invoices as of June 1, 2020?

Zoom has undertaken an assessment of its services and determined that all are subject to VAT in Switzerland.  Additionally, as Zoom grows its international presence, it has implemented the systems necessary to identify customers who are subject to VAT and properly reflect charges on invoices.  On or shortly after June 1, 2020, Zoom will register for Swiss VAT and begin charging VAT on invoices and transactions (regardless of whether the services are provided to a VAT registered or non-VAT registered customer). 

Is there a minimum threshold purchase amount before VAT is applied?

No.  VAT applies to sale of all Zoom’s services.

What exemptions are available?

None.  There are no exemptions available from the VAT as all services provided by Zoom in Switzerland are taxable supplies.

Are there any special exemptions applicable for charities under which VAT may not be charged?

No.  There are not any exemptions available from the VAT applicable for charities.

Will VAT apply even if a Swiss company provides a valid VAT number to Zoom?

Yes.  VAT applies to the sale of all Zoom’s services. 

Are there any VAT obligations for me as a customer?

No.  The customer in principle has no VAT obligations.  If you are a Swiss VAT taxable person and you want to claim an input tax credit for the VAT paid to Zoom, you should ensure to keep a copy of Zoom’s invoice for your record.