Digital Services & Swiss VAT Rules

Foreign businesses that supply digital services to customers established in Switzerland may be subject to Swiss VAT. The decisive factors are the correct qualification of the service, the determination of the place of supply, and any resulting registration requirement.

Special place-of-supply rules apply to telecommunications and electronic services; in addition, the CHF 100,000 worldwide turnover threshold is relevant to the extent the turnover stems from services that would be taxable in Switzerland under Swiss law. Where such services are supplied to private consumers (B2C) in Switzerland and the threshold is exceeded, the obligation arises to register for Swiss VAT and to invoice and remit Swiss VAT.

Delimitation of Services

Electronic services include, in particular, cloud and SaaS offerings, downloads and streaming, apps including video games, and AI-based services. These must be distinguished from supplies of goods and purely advisory activities, as the classification affects the place of supply and, consequently, the VAT treatment.

Place of Supply and Liability of Foreign Providers

For B2C supplies, the place of supply is generally where the recipient is resident in Switzerland.

For B2B acquisitions into Switzerland, the tax is in principle accounted for by the Swiss recipient under the acquisition tax (reverse charge). Registration in Switzerland is often not required for purely B2B imports but may become necessary where B2C sales or other domestically taxable transactions are also carried out.

Once the registration threshold is exceeded, the provider must charge Swiss VAT, file returns on time, and meet all formal obligations, irrespective of whether the service is technically rendered from abroad, provided it is taxable in Switzerland under Swiss law.

Platform and Marketplace Scenarios

In the Apple App Store, Apple typically acts on the Swiss store as the responsible intermediary (often as the merchant of record) and invoices Swiss VAT to end customers; the foreign developer or content provider is therefore not required to register in Switzerland for those specific transactions, assuming no other taxable activities are carried out in Switzerland. In the Google Play Store, the obligations in Switzerland generally remain with the provider; the developer must charge and account for Swiss VAT on app and in-app sales, while any platform service fees are assessed separately.

A clear contractual and operational documentation of the platform’s role is essential and must be reflected consistently in invoicing and systems.

Consequences of Non-Compliance

Failure to register or incorrect reporting can lead to retroactive assessments for up to five tax periods, plus interest and penalties. The financial exposure is particularly significant where B2C sales are broad and diffuse.

Mitigating Exposure in B2B Settings

In B2B scenarios, exposure can often be reduced where Swiss recipients have correctly self-assessed and declared the acquisition tax. In such cases, the Federal Tax Administration (FTA, VAT) frequently refrains – after reviewing supporting evidence – from imposing a duplicative charge on the foreign provider. Robust documentation of transactions and declarations is required.

Contact

RSM Switzerland supports foreign providers of digital services with registration, voluntary regularization, and ongoing compliance, including fiscal representation, process and ERP setup, documentation packages, and liaison with the FTA (VAT). To schedule an initial consultation, please contact our VAT team. We will analyze your situation, determine roles and place of supply under Swiss VAT law, and plan implementation with a clear timeline and cost framework.