Have there been any changes or not?

Unfortunately I have only just got round to looking at the FTA’s publications of 19 and 30 December 2014. On these dates the FTA announced on its website that changes had been made in 10 VAT practice and industry infos as from 1.1. 2015.

However, with the new web-based publication it is extremely difficult to discover what, if anything, has changed. The web solution provides a function, which describes the history, but nonetheless a comparison on this basis is still very difficult. The earlier publications of the practice changes in separate brochures was tiresome, because the full brochures were not updated. But nonetheless based on these separate brochures one had an overview of what had changed.

I have taken the trouble to analyse the practice changes in the VAT Info 04, Taxable object. Specifically the issue is the distinction between donations, publicity services (by charitable organisations) exempt from the tax without credit and taxable advertising services. The comments by the FTA attempt to clarify these distinctions. An overview of the distinction is shown below:

Contribution

Two extremes emerge. If the contribution is not associated with a name or at most with a name in a neutral publication, then it is a donation. If the contribution is not publicised in neutral form and not by a charitable organisation, it is always a taxable advertising service. Between these extremes especially for charitable organisations there are difficult distinction issues. Is it a publicity service exempt from the tax pursuant to Art. 21 ch 27 VAT Law, because publicising the donor’s commitment to the organisation is the main objective? Or is it a taxable advertising service, because the charitable organisation is advertising specific products or services. The examples in the FTA’s publication illustrate how difficult it is in practice to demarcate the facts from case to case.

Charitable organisations are also advised to review the question of the option, i.e. voluntary taxation of the contribution. This always makes sense if the VAT can be passed on to the enterprise making the contribution. This is not problematical, if the contributing enterprise enjoys full input tax deduction. If the publicity service is taxed, the tricky definition questions are otiose.

We still have to review whether in the other 9 publications relevant changes in practice have been introduced.

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Eine Antwort zu Have there been any changes or not?

  1. Pingback: Have there been any changes or not? PwC | Schweiz

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