A number of my clients provide installation and maintenance services as part of their business. I call these services “boots on the ground” services, because they require physical, on-site work.
Doing so in Switzerland may create a VAT registration liability from January 1, 2015 onwards. This is because the definition of the supply of “goods” in Swiss law includes installation and maintenance – these supplies are not considered as services.
The Swiss tax administration puts it this way:
“it refers not only to the transfer of the economic power to dispose of an item, but also to the execution of work on an item and even the rental and leasing of an item.”
Therefore, no reverse charge on Swiss installation and maintenance services, even if they have been subcontracted to a Swiss contractor!
“As of the beginning of 2015, foreign companies whose revenues from the supplies of goods (incl. construction and similar work) effected in Switzerland exceed CHF 100,000 p.a. will be liable to register for VAT in Switzerland and charge Swiss VAT on the invoices to their clients. If the annual threshold is not exceeded, the business might still opt to register for VAT on a voluntary basis, or – as is the case today – remain unregistered and benefit from the reverse-charge procedure.
The threshold of CHF 100,000 will explicitly not apply to the services provided by foreign businesses not registered for Swiss VAT (except for B2C electronic services). The reverse-charge procedure will thus remain applicable regardless of the turnover achieved by the concerned entities.
It is however worth mentioning that the Swiss definition of services is much tighter than e.g. the EU’s one and, for example, does not include pure installation or maintenance work or leasing supplies.”
More info in this KPMG link: http://blog.kpmg.ch/swiss-vat-liability-of-foreign-companies/
And the notice from the Swiss tax authorities (English version): https://www.news.admin.ch/message/index.html?lang=en&msg-id=55183