VAT in the digital economy

Case 1 - Dating Inc. USA - dating agency

Facts

Dating Inc., based in the USA, operates internet dating sites. The majority of these sites allow users to find each other by country or language and by interests (religion or other criteria). Meetings of users are first held virtually. Participants can then make appointments. The Dating Inc. sites offer various services to users, such as

• the creation of profiles,
• registration in directories and access to information about other users,
• the visit of online shops
• Discussion forums,
• Instant messaging,
• Webcam and
• Blogs.

The websites offer several levels of participation and allow access to more or less detailed information about other users. The amount paid by users depends on the category of member. Primary access is free of charge.

The company has an inspection service for 350 people in the USA, some of whom are US subcontractors. They check the user profiles created or modified to remove inappropriate profiles.

Dating Inc. has no offices or personnel in Switzerland. Dating Inc. is also not registered in the Swiss commercial register.

Questions

Is Dating Inc. subject to value added tax in Switzerland according to MWSTG 2018? Which arguments speak for, which against a tax liability?

Case 2 - Connected Ride

Facts:

Connected Ride is a US-based technology platform that connects passengers with riders via a smartphone app (hereinafter Connected Ride US 1). The company sees itself as a technology company that provides an app, not a transportation company.

Any similarity with similar cases is purely coincidental.

The following is a detailed graphical representation of the situation:

Connected Ride Netherlands 2 has concluded a cooperation agreement with "Connected Ride Ireland 3, under which Connected Ride Netherlands 2 grants Connected Ride Ireland 3 a license for the use of the Connected Ride software.

Ratio of domestic passengers to Connected Ride Ireland 3

Domestic passengers who wish to use the Connected Ride service must register with Connected Ride Ireland 3 via an app with name, address and credit card details.

After completing a trip booked via the app, the passenger receives the following invoice, which is debited directly to the credit card:

• Passenger name: Hans Fahrgast
• Name of driver: Fritz Fahrer, Switzerland
• invoice number: 1234568
• Date of invoice: 28 September 2018
• Date of travel 28.09.2018
• Description Transport service
• Fare - 49,13 CHF
• Total net amount 49.13 CHF
• Total amount 49,13 CHF
• Invoice issued on behalf of drivers through Connected Drive Ireland.

Rider to Connected Ride ratio Ireland 3

Connected Ride Ireland 3 concludes a contract of use with each of the domestic Connected Ride riders.

The contract of use states that the driver owns a car and is looking for passengers. The contract explicitly states that Connected Ride Ireland itself does not provide transport services. Rather, Connected Ride Ireland organises and plans the transport services of the drivers.

The contractual service of Connected Ride Netherlands towards the driver consists of handling requests from passengers inc. destination to the driver.

For providing access to the software, Connected Ride Netherlands 2 charges the driver a service fee of 20% of the ticket price.

The fare reduced by the service fee is electronically transferred to the driver by Connected Ride Netherlands 2.

driver-customer relationship

The contract of use also stipulates that a separate contract is concluded between the passenger and the driver for the respective ride.

Question

How do you assess the situation from a Swiss VAT perspective?

Case 3 - Electronic ticket platform

Facts

The Ticket-Plattform GmbH enables event organizers to enter their events online via their user account in the ticketing platform, and customers to buy tickets directly via the platform.

The facts can be graphically represented as follows:

customer-organizer relationship

The organizer provides the event services directly to the customers. Ticket-Plattform GmbH is therefore not itself the organiser of the events offered on Ticket-Plattform.

Relationship between Ticket-Plattform GmbH and organiser

With the creation of a user account by the organizer, Ticket-Plattform GmbH and the organizer enter into a contract on the use of the platform and the mediation and conclusion of ticket contracts between participants and the organizer by Ticket-Plattform GmbH on behalf of the organizer. The events are recorded on the Ticket Platform by the Organizer.

Ticket-Plattform GmbH is thus constantly entrusted by the organizer with the task of arranging ticket sales for the organizer as a closing agent and to conclude them in its name.

Ticket-Plattform GmbH charges the organiser a ticket fee of CHF 0.50 plus 4% of the ticket price. For this purpose, the Event Organizer is requested in the course of its registration to provide a bank account to which the ticket prices paid by customers - minus the ticket fee retained by Ticket-Plattform GmbH - are transferred.

Relationship between Ticket-Plattform GmbH and ticket buyers

Ticket-Plattform GmbH offers the tickets exclusively in the name of the respective organizer. The presentation of the event on the Ticket Platform constitutes a binding request by the promoter to conclude a contract for participation in the advertised event. By clicking the button "Buy Now" a contract between the customer and the event organizer for participation in the event is concluded.

Basically, the delivery of tickets by Ticket-Plattform GmbH is carried out via PDF download or via e-mail delivery to the e-mail address provided by the customer.
If the customer pays by credit card, the purchase price will be charged directly by Ticket-Plattform GmbH on the credit card indicated at the time of the order.

Question

How do you assess the situation from a Swiss VAT perspective?

Sachverhaltsergänzung

Relationship between Ticket-Plattform GmbH and organiser

The use of the ticket platform is offered free of charge to event organisers by Ticket-Plattform GmbH.

The organizer further agrees that advertisements of third parties, of whatever kind, may be placed on the pages on which his events are advertised. The tickets issued by Ticket-Plattform GmbH also contain advertisements and/or vouchers of third parties.

Thanks to the advertisements and vouchers of advertising partners on the tickets, the Ticket Platform GmbH can cover its costs and offer ticketing completely free of charge for event organizers and ticket buyers.

Ticket-Plattform GmbH transfers 100% of the ticket income to the organizer without deduction of a commission.

Relationship between Ticket-Plattform GmbH and advertising partners

Ticket-Plattform GmbH offers advertising partners advertisements and vouchers for placement on the Ticket Platform and electronic tickets for a fee.
This factual supplement can be represented graphically as follows:

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Question

How do you assess the amendment from the Swiss VAT perspective?

Case 4 - Hypo-Connect

Facts

Hypo-Connect is a technology-based consulting platform for the independent brokerage of mortgages. The Fintech company arranges mortgage financing solutions for its customers from over 100 partners (banks, insurance companies). The partners are independent third parties.

The arrangement of the financing is fully automated. For example, Hypo-Connect carries out a fully automated check of the mortgage requirements, the matching of borrower and lender and the preparation of the corresponding contract documents. The customer advisor involved in Hypo-Connect is the borrower's sole contact person, but is not involved in bringing borrower and lender together due to the automation.

Hypo-Connect does not charge any fees to the borrowers and bears its costs from the brokerage fees it receives from the partners.

Question

How do you assess this situation from a Swiss VAT perspective?