The last VAT rate change took place in 2018. Based on our past experiences, we would generally expect the Swiss Federal Tax Administration (“SFTA”) to set transition rules covering both the tax point and resulting invoicing, as well as reporting rules.
The standard rule is that the tax point arises either upon invoicing or with the collection of the consideration if made in advance of payments (reporting based on agreed consideration). Deviating from the standard rule, the practice of the SFTA for recent VAT rate changes applied the date of the supply as a tax point for determining whether the old or the new VAT rate must be considered. For the transition period, thus, neither the invoice date nor the payment date could be decisive.
In case of so-called continuous supplies, various questions around the date of the supply are triggered. Continuous supplies (e.g. subscription to newspaper) are, moreover, often payable in advance. If such supplies cross both periods (pre as well as post the introduction date of the VAT increase) the SFTA in recent VAT rate increases provided a practice that the consideration needs to be divided pro rata temporis between the old and new VAT rate period covered by the supply.
Whether reductions of consideration such as discounts, rebates and the likes applied prior to the introduction of the new VAT rate (2024), need to be adjusted with the old tax rates like in recent VAT rate changes will have to be assessed based on the transition rules to be published by the SFTA.
Source: Deloitte
