On the historical 15 January 2015 Switzerland stopped defending the Euro-cap. Even then we were already wondering what effects that would have on the exchange rate with the FTA. For purposes of calculating the VAT payable considerations in a foreign currency have to be translated into the national currency. If the monthly average rate is opted for, the rate published by the FTA has to be applied. For January this was CHF 1.21.
We assumed that for February the monthly average rate would approximate the current rate. But because for its calculation the FTA stoically stuck to the same pattern (daily rates from 25 December up to 24 January), the monthly average for February is still CHF 1.1596.
Therefore for every foreign currency invoice received about 15% more VAT can be claimed than effectively paid. It is always unfavourable, if supplies charged with VAT are invoiced in a foreign currency. The strategy of delaying the invoicing, as I recommended in my last blog on this subject, is effective, only if invoicing is delayed until the beginning of March. Adversely affected are also those taxpayers, who have to declare acquisition tax and cannot claim the full input tax.
The FTA points out in its publication that a change from the monthly average rate to the daily rate is possible until the end of the first quarter 2015. If this option is chosen, then all foreign currency amounts from January to December 2015 have to be translated at the relevant daily rates published.