In fact, when we talk about acquisitions, or more particularly expenses acquired from foreign suppliers, the following considerations must be kept in mind:
The Sales tax that must be paid on acquisitions to the AFC (by means of the self-taxation mechanism in the Sales tax return), is 100% recoverable, partially or not at all recoverable (0%), depending on the structure of the turnover achieved by the company in question. Therefore, it is very important not to neglect the Sales tax aspect on acquisitions, because a tax burden may result for the company (Sales tax to be declared full pot, but sometimes the input tax is only partially or not at all recoverable). The use of the free sales tax calculator is important.
The Sales tax risk on acquisitions is particularly high for the following categories of taxable persons:
- Individuals, private individuals not subject to Sales tax (excess of CHF 10,000 per year)
- Companies not subject to Sales tax (because they have a taxable turnover of less than CHF 100,000 per year, for example)
- Sporting and cultural clubs run on a voluntary basis, foundations and associations recognized as being of public utility not subject to Sales tax (because they have a taxable turnover of less than CHF 150,000 per year)
- Sales tax liable (companies, foundations, sports clubs, etc.) making acquisitions in close connection with the achievement of excluded turnover
- Taxable persons deducting Sales tax according to the “Net tax debt rate” method (so-called TDFN method)
Given that for the categories of taxpayers mentioned above, there is compulsory declaration of Sales tax on acquisitions, but no recovery possible of this paid Sales tax (preliminary tax)!
It is therefore extremely important not to take this issue of corporate acquisitions lightly.
As a reminder, you should know that before any calculation of Sales tax on acquisitions, it is first of all very important to identify the acquisitions that will be the subject of the calculation. Only once the acquisitions have been properly identified, then it will be possible to calculate the Sales tax on them.
In general, it is also very important to remember that any transaction which is not considered as a delivery of goods (art. 7 Sales tax Act) is to be considered by default as a provision of services! By provision of services, we must understand in principle all the elements which are not physically tangible, unlike goods.
The following services are subject to acquisition tax:
Provision of services
According to article 45, para. 1 Sales tax Act, are subject to the acquisition tax, concerning the provision of services, only those which have for tax the place where the recipient of the service is located. This means that it is not the supplier but the recipient of the service who must pay the Sales tax to the AFC that charges these supplies of services imported into Switzerland.