Charitable foundations in tax law - open questions
Non-profit status depends largely on the framework conditions. If these are right, people are willing to make a contribution - be it through donations or volunteering. Tax law provides important incentives: it exempts charitable organizations from tax liability and allows donations to charitable organizations to be deducted from taxable income. Tax law has thus made a significant contribution to the strong growth of the charitable sector in recent years. The foundation sector is booming.
Foundations and value added tax
Since the introduction of value added tax (VAT) in 1995, its application to foundations has repeatedly given rise to discussion. Questions such as whether and when they are liable to pay tax, whether they are allowed to deduct input tax or when they are considered charitable still give rise to discussions today. The Federal Supreme Court has also dealt with VAT issues relating to foundations on several occasions. In the new revision of the Value Added Tax Act (VATA), there are also changes that could affect foundations in particular. This article deals with the most important issues that foundations have to deal with in the VAT environment.
VAT treatment of fiscal and other financial incentives to promote business locations
As a result of the global minimum tax, Switzerland must rethink its existing fiscal incentives to strengthen the location of business standards. The tax advantage of existing incentives (e.g. special R&D deduction, patent box) loses its effectiveness for affected companies. The first cantons are therefore proposing new instruments such as the Qualified Refundable Tax Credit or state subsidies. This article examines the question of whether such new incentives to promote business locations fall under the VAT term "subsidies and other contributions under public law" and how they should therefore be treated, in particular to what extent a reduction of the input tax deduction should be applied or can be waived.
Partial revision of the MWSTG and current developments
On June 16, 2023, the Federal Assembly adopted the partially revised VAT Act. In addition to the core element of taxing supplies via electronic platforms, the partial revision also includes numerous changes in the areas of internationalization, tax reductions, combating fraud and other simplifications. Entry into force is planned for January 1, 2025. Whether this date can be met also depends to a large extent on the partial revision of the VAT Ordinance, the draft of which is currently undergoing consultation from October 25, 2023 to February 8, 2024.
National Council wants VAT exemption for cultural associations
Participants at cultural events such as the Yodel Festival should be able to benefit from a VAT exemption in future - just like participants at sports events. On Wednesday the National Council adopted a motion tabled by SVP National Councillor Pierre-André Page (FR).
Publication of the drafts of the practice definitions of the VAT Department (14 March 2019)
The Federal Tax Administration (FTA) published various drafts on VAT practice on 14 March 2019:
Stricter rules for cross-border online trade
The rules for cross-border online trade will be tightened: the Federal Council must take measures to make foreign online marketplaces and service platforms subject to value-added tax when supplying goods or services to Switzerland.
National Council wants to reduce VAT rate for tampons and bandages
Tampons, bandages and panty liners are to become cheaper. The National Council wants to reduce the VAT rate for feminine hygiene products. Tacitly, on Friday, he tacitly accepted a motion by Neuchâtel SP National Councillor Jacques-André Maire. This will now go to the Council of States.
Publication of drafts of the practice definitions of the VAT Department (14 February 2019)
On 14 February 2019, the Federal Tax Administration (FTA) published a second draft on the determination of practice.
Publication of the drafts of the practical definitions of the VAT Department
On January 29, 2019, a revised first draft on the VAT practice topic: Cryptocurrencies was posted on the website. The deadline for comments is February 19, 2019, and the first draft will remain on line after the practical consultation.
VAT registration for mail order companies
On 1 January 2019, Article 7(3)(b) of the Federal Law on Value Added Tax (the so-called mail order regulation) will come into force.
Repayment of VAT on reception fees to all households in preparation
In four test cases, the Federal Court ordered on 2 November 2018 the refund of VAT on radio and television reception fees from 2010 to 2015. As a result of these rulings, the Federal Department of the Environment, Transport, Energy and Communications (DETEC) is proposing that the Confederation refund VAT to all households. DETEC is now preparing a legal basis for a lump-sum refund in the form of a credit to all households without the need for them to take action.
Selected VAT aspects in M&A transactions
Workshop by Clara Bodemann and Paul Müller-Wittwer on the occasion of the ISIS) seminar on 05 April 2022 entitled "Current tax issues in national and international M&A transactions".
Transactions et restructurations: cas pratiques en matière de TVA
Cas pratiques présentés par Umberto Ottavianelli et Jacques Pittet lors du séminaire ISIS) du 03 novembre 2021, intitulé "Restructurations / Fusions / Acquisitions".
Current developments in VAT law (2021)
Workshop by Ralf Imstepf and Roger Rohner on the occasion of the ISIS) seminar on 14/15 and 21/22 June 2021 entitled "Corporate Tax Law 2021".
ISIS) seminar "VAT. Up-to-date. Compact. Interdisciplinary." (Seminar folder)
Case studies, detailed solution notes and slides: Here you will receive all documents (workshops and presentations) according to the following description from the ISIS) seminar "VAT. Up-to-date. Compact. Interdisciplinary." on 24.09.2020 under the direction of Harun Can, which took place at the Marriott Hotel in Zurich.
