Digital services: Towards a new VAT liability for electronic platforms in Switzerland?

The Federal Council has reached a new milestone in the digitalization of the Swiss VAT system. 

Following the implementation of platform taxation for the sale of goods on January 1, 2025, a new consultation was launched on 5 December 2025, to extend this model to electronic services.

1. The "deemed supplier" rule: redefining the role of platforms

   The proposal aims to radically simplify the collection of VAT on digital services consumed in Switzerland. Currently, the Swiss Federal Tax Administration (SFTA) faces challenges in identifying and registering the various foreign suppliers offering applications or online content.

   This principle would introduce a legal fiction:

   •    The commercial reality: A foreign developer sells an application to a Swiss user via an electronic platform.

   •    The VAT fiction: The online platform (e.g., an app store or streaming marketplace) would be treated as the purchaser of the service from the supplier, and subsequently as the direct reseller to the end customer.

2. Scope of services and exclusions

   The tax authority intends to harmonize the VAT treatment for the sale of goods and digital services ordered through online platforms. 

   The primary targets include:
   •    Downloads and subscriptions for software and applications.
   •    Streaming of films, music, and video games.
   •    Other automated electronic services.

   Important: The proposal explicitly excludes intermediation services for physical supplies, such as accommodation rentals or transport services, which remain subject to standard service supply rules.

3. Consequences for businesses

   This paradigm shift would redistribute administrative responsibilities:

   •    For platforms: They become the sole point of contact for the SFTA for all transactions they facilitate. They will be required to register for VAT in Switzerland, calculate, invoice, and remit the tax (8.1% at the standard rate).
   •    For underlying vendors: Many foreign providers may be able to deregister from the Swiss VAT register, as their sales will be "absorbed" for tax purposes by the online platform. However, it should be noted that this exemption for underlying vendors is not absolute. They retain full responsibility for their VAT obligations for any transaction conducted outside a third-party digital interface, notably via their own direct sales website, or for the provision of services not covered by the proposed reform.

4. Strengthening enforcement measures

   To ensure the effectiveness of this measure, the Federal Council proposes granting new powers to the SFTA. As a last resort, the authorities could order the blocking of network access for platforms that fail to comply with their tax obligations in Switzerland, following the model already in place for online gambling.

5. Timeline and Next Steps

   The official consultation procedure is open until 19 March 19 2026.

   Anticipation is the key to a successful transition. RSM Switzerland offers tailored assistance to ensure optimal management of both current and future VAT obligations. 

   RSM Switzerland would be pleased to assist you. Should you require our support, please do not hesitate to contact our VAT team.