The Swiss Federal Tax Administration has recently submitted a proposal to adapt the current VAT practice in relation to trusts. While the project is essentially a clarification rather than a change in practice, the authors will address in this article the VAT treatment of trusts from a VAT perspective in Switzerland, the United Kingdom and the EU, with an emphasis on cross-border situations different VAT regimes may apply.
Before explaining the VAT practice applicable on trusts, it is important to understand the various forms of trust as they are treated differently for VAT purposes. This overview is based on the recent proposals of the Swiss VAT authorities.
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