Practical specifications for sales tax for brokerage activities within a group relationship

Recent case law in the area of sales tax for intermediaries in a group relationship has prompted the FTA to make clarifications in its administrative practice regarding Art. 13 para. 1 and Art. 13 para. 3 lit. b no. 2 StG. The two practical clarifications will be applied with immediate effect and will apply to all cases currently pending with the FTA.

Commercial activity is a mandatory requirement for brokerage within the meaning of Art. 13 para. 2 lit. b no. 2 StG. The brokerage of taxable documents within a group constitutes a service provided by a group company (management company) for the benefit of other group companies, which is why it does not qualify as commercial. This means that there is no business activity subject to sales tax in the case of exclusively intra-group brokerage activities.

Brokerage pursuant to Art. 13 para. 1 StG by a domestic holding company is only subject to turnover tax if there is evidence brokerage or brokerage brokerage. There is no brokering or intermediation if i) the holding company (or another group company) commissions an independent investment bank with a transaction and remunerates it for this or ii) if the negotiations are conducted by a person who is not part of the domestic holding company pursuant to Art. 13 para. 3 StG.

Advance tax rulings can be submitted to the FTA.

Further information is available here.