Who is liable for tax?

According to Art. 10 of the VAT Act, anyone who operates a business without the intention of making a profit and irrespective of its legal form and purpose and provides services in Switzerland with this business or has their registered office, domicile or permanent establishment in Switzerland is liable to pay tax.

A company is operated by anyone who independently carries out a professional or commercial activity aimed at the sustainable generation of income from services and appears to the outside world under their own name.

In particular, natural persons (sole proprietorships), partnerships (such as general and limited partnerships), legal entities under private and public law, dependent public institutions and groups of persons without legal capacity which - such as joint ventures active in the construction industry - generate turnover under a joint company name may be subject to tax.

Exemption from tax liability

In principle, anyone who generates less than CHF 100,000 turnover in Switzerland and abroad within one year from supplies that are not exempt from tax under Art. 21 para. 2 of the VAT Act is exempt from tax liability.

Anyone who has their registered office, domicile or permanent establishment in Liechtenstein and exclusively provides services abroad is also exempt from tax liability. Anyone who exclusively provides exempt services in Liechtenstein is also exempt.

The only exceptions to the above limit of CHF 100,000 relate to non-profit sports or cultural associations and charitable organizations, which are subject to a limit of CHF 250,000.

Furthermore, anyone who operates a company based abroad that exclusively provides one or more of the following types of services in Switzerland, irrespective of turnover, is exempt from tax liability:

1. supplies exempt from tax,
2. services exempt from tax,
3. services whose place of supply is in Switzerland in accordance with Art. 8 para. 1 of the VAT Act; however, anyone who supplies telecommunications or electronic services to non-taxable recipients is not exempt from tax,
4. the supply of electricity in lines, gas via the natural gas distribution network and district heating to taxable persons in Switzerland.

Purchase of services from companies based abroad

Anyone who is not already liable to pay tax under Art. 10 of the VAT Act will also be liable to pay tax if they purchase services or supplies that are subject to purchase tax for more than CHF 10,000 in a calendar year.

The following are subject to purchase tax:

• Services whose place of supply is in Switzerland in accordance with Art. 8 para. 1 of the VAT Act and which are provided by companies domiciled abroad that are not entered in the register of taxable persons, with the exception of telecommunications or electronic services to non-taxable recipients;
• the import of data carriers without market value with the services and rights contained therein (not subject to import tax if no market value can be determined in accordance with Article 52 para. 2 of the CH VAT Act)
• the supply of immovable goods in Switzerland that are not subject to import tax and that are supplied by companies domiciled abroad that are not entered in the register of taxable persons, with the exception of the transfer of such goods for use or utilization;
• the supply of electricity in pipelines, gas via the natural gas distribution network and district heating by companies based abroad to taxable persons in Switzerland;
• the transfer of emission rights, certificates and attestations for emission reductions, guarantees of origin for electricity and similar rights, attestations and certificates by companies with their registered office, domicile or permanent establishment abroad or in Switzerland that are not exempt from domestic tax under Art. 21 para. 2 no. 19 let. e.

For recipients of supplies who are not already taxable under Art. 10 of the VAT Act, tax liability under Art. 45 of the VAT Act is limited to the receipt of such supplies.

Persons who are already liable for tax must account for each purchase.

Start and end of tax liability

In principle, tax liability begins with the commencement of the business activity and ends with its termination. Once the business activity has commenced and the company is entered in the VAT register, it can be exempted from tax liability if it no longer reaches the relevant turnover limit and it is to be expected that it will not reach it in the following tax period either. In this case, it must submit an application for deletion to the Fiscal Authority via the eMWST portal; otherwise, it is assumed that it is waiving its exemption from tax liability (voluntary tax liability).

In the case of foreign companies, the tax liability begins with the first domestic supply and ends at the end of the calendar year in which the last domestic supply is made.

Obligation to register

Anyone who fulfills the conditions for tax liability must register with the Liechtenstein Fiscal Authority via the eMWST portal within 30 days of fulfilling the conditions by submitting the "Value Added Tax Division registration" application.

Note for companies based abroad (outside FL and CH):

If your company is already entered in the Swiss VAT register or taxable supplies are made in Switzerland, no entry will be made in the Liechtenstein VAT register. Responsibility for the collection of Value Added Tax lies with the Federal Fiscal Authority in Bern. Any additional turnover generated in Liechtenstein must be invoiced to the Federal Fiscal Authority.