Topics covered include VAT obligations
2.5 Value Added Tax
Notification procedure for merger, demerger, transformation and transfer of Assets
Article 38 paragraph 1 of the Federal Act of 12 June 2009 on Value Added Tax (MWSTG; SR 641.20) regulates the procedure in the case of restructurings in accordance with Articles 19 or 61 DBG, as well as in the case of a transfer, whether for consideration or not, of a total or or partial assets from one taxable person to another taxable person, even if the transferee becomes liable to tax only by taking over the assets, in the context of a formation, a liquidation, a restructuring, a sale of business, or a legal transaction governed by the Merger Act.
If, in the aforementioned constellations, the VAT charged on the sale price at the statutory rate exceeds CHF 10,000 or if the sale is made to a closely related person (cf. Art. 3(h) VAT Act), the taxable person must apply the reporting procedure and fulfill his obligation to account for and pay tax by submitting a report. This notification must be made as part of the regular VAT statement and at the same time using form no. 764.
Voluntary application of the reporting procedure is possible in the cases regulated in Article 104 of the Value Added Tax Ordinance of 27 November 2009 (MWSTV; SR 641.201).
If the reporting procedure is applied, the acquirer assumes the tax base and the taxable amount for the the tax base and the degree of use of the seller that entitles him to deduct input tax (VAT)
If the acquirer uses the assets for taxable purposes to a lesser extent than the seller, an own consumption is subject to own use taxation. In the opposite case, the acquirer can claim a tax deduction on the contribution. The starting point for the examination of whether such changes of use exist is Article 105 MWSTV. According to this article, it is presumed that the transferor has used the transferred assets in their entirety for taxable purposes. If the acquirer claims a different degree of use, he must prove this.
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