For purposes of calculating the VAT payable, foreign currency considerations are translated into the national currency at the date the tax claim arises. The taxpayer can choose whether he wants to apply the monthly average rate published by the FTA or the daily rate. The method chosen must then be retained for at least one tax period.
The monthly average rate is always fixed as at the 25th of the preceding month. The monthly average rate for January is CHF 1.2146. As a result of the fall in the rate we asked the FTA whether the rate for January will be adjusted. This is the response:
For the monthly average rate for January 2015 the daily rates from 25 November 2014 to 24 December 2014 were used for the calculation and it was published on 25 December. It is to be applied in January 2015. The fall on 15 January 2015 will therefore not flow into the calculation of the monthly average rate until the month of February 2015 (which is calculated using the published daily rates from 25 December 2014 up to and including 24 January 2015 and will be published on 25 January 2015). There will therefore be no adjustments to the monthly average rate for January 2015.
With kind regards
This practice has positive and negative consequences. Every incoming invoice issued in a foreign currency, which is charged with VAT, benefits from this rule. The deductible input tax can still be claimed at the rate of CHF 1.2146, although for payment the actual rate of about CHF 1 can be applied.
It is less positive for the Swiss supplier, who invoices his supplies to customers resident in Switzerland in foreign currency. If he doesn’t want to pay about 20% more VAT, he can either delay his invoicing in foreign currency until the beginning of February or, for the translation, switch to the daily rate from 1.1.2015. However, a change has the disadvantage that this method then has to be retained until the end of 2015.