Exemption at source from value added tax (VAT) for permanent missions (PM), international organisations (IO) and their members of personnel who enjoy diplomatic status
Principles
The permanent missions and international organisations (hereinafter “institutions”) are exempt from the payment of VAT on acquisitions destined for their official use and for services received in an official capacity (article 107, par. 1, let. a, of the federal Law on the Value Added Tax and Articles 143 to 150 of the federal Ordinance on VAT).
Persons enjoying diplomatic status are exempt from VAT for acquisitions intended strictly for their personal use and for services received on a strictly personal basis (cf. above-mentioned legal references). This applies to staff members holders of a legitimation card of type “B” or “C” and family members with a Ci permit obtained in exchange for their legitimation card of type “B” or “C”.
In 2014, by circular verbal note, certain rules regarding the exemption of VAT and the procedure for exceptional requests for reimbursement were clarified and remain in force (the verbal note is available in the chapter “Documents” below).
Exemption from VAT is accorded at source by the supplier (shop or firm) on goods costing at least CHF 100 per invoice (including VAT).
Under exceptional circumstances, duly justified, an exceptional request for reimbursement of VAT may be submitted: twice annually in the case of institutions, and once annually for individuals (submissions to be grouped by institution). From 1st January 2025, the Main Division of VAT will only accept invoices dated from the last completed year. In 2024, it will continue to process invoices issued prior to 2023, but dating back a maximum of 5 years (statute of limitations) and up to the annual limit of 50 invoices for individuals and unlimited for institutions.
If the beneficiary is unable to obtain exemption at source for purchases made on the Internet, they can apply for exceptional reimbursement. Institutions and individuals must not only enclose the invoice with their exceptional claim for reimbursement, but also proof of payment.
Procedure for institutions
Form « A »: VAT exemption at source
For all invoices equal to or in excess of CHF 100 (including VAT), the institution must provide the supplier with form A, duly completed and with the official seal of the institution and the signature of the authorised person, before payment or at the time the order is placed. The supplier then grants exemption from VAT at source.
The purchaser must be able to prove that he is acting on behalf of an institution. When purchasing directly in shops, it is strongly recommended that the purchaser be in the possession of specific authorisation from the institution in question.
Form « AA »: VAT exemption at source for telecommunications, water, gas and electricity bills
VAT is deducted at source on all invoices for telecommunications (services based in Switzerland) as well as for water/gas/electricity bills (municipal services or electric companies) without a lower limit.
The institution must provide each supplier with form AA, duly completed and with the official seal of the institution and the signature of the authorised person. Form AA is valid for five years from the date of issue. The supplier then grants exemption from VAT at source.
Form « C »: request for exceptional reimbursement of VAT
In exceptional circumstances, with a justifiable explanation, and in particular for cases in which the supplier has refused to grant exemption at source from VAT despite a request submitted in the prescribed manner, reimbursement may be granted. Only invoices equal to or in excess of CHF 100 (including VAT) can be considered.
In each case, Swiss authorities reserve the right to request suppliers to provide a reason for not granting the VAT exemption at source.
The institutions may submit a request for exceptional reimbursement twice annually by submitting form C, duly completed and with the official seal of the institution and the signature of an authorised person, directly to the Main Division of VAT (see details below). Each form C must be accompanied by the original invoices (or in exceptional cases photocopies bearing the original seal of the institution on each invoice). The invoices will be returned to the institution in due time.
Procedure for persons
Persons must show their legitimation cards of type "B" or "C" or Ci permit together with a VAT exemption form to the supplier before payment (or at the time the order is placed).
Form « B »: VAT exemption at source
For all invoices equal to or in excess of CHF 100 (including VAT), and prior to payment, the person must provide the supplier with form B. It must be duly completed and signed, with the official seal of the institution employing the person and the signature of an authorised person. The supplier then grants exemption from VAT at source.
Form « BB »: VAT exemption at source for telecommunications, water, gas and electricity bills
VAT is deducted at source on all invoices for telecommunications (services based in Switzerland) as well as for water/gas/electricity bills (municipal services or electric companies) without a lower limit.
The person must provide the supplier with form BB. It must be duly completed and signed, with the official seal of the institution employing the person and the signature of an authorised person. Form BB is valid for five years from the date of issue. The supplier then grants exemption from VAT at source.
Form « D »: request for exceptional reimbursement of VAT
In exceptional circumstances, with a justifiable explanation, and in particular for cases in which the supplier has refused to grant exemption at source from VAT despite a request submitted in the prescribed manner, reimbursement may be granted. Only invoices equal to or in excess of CHF 100 (including VAT) can be considered. The number of invoices that can be reimbursed is maximum 50 per year.
In a particular case, Swiss authorities reserve the right to request suppliers to provide a reason for not granting a VAT exemption at source.
Individuals may submit a request for exceptional reimbursement once a year by submitting form D, duly completed and with the official seal of the institution employing them and the signature of an authorised person, directly to the Main Division of VAT (see details below). Each form D must be accompanied by the original invoices (or in exceptional cases photocopies bearing the original seal of the institution on each invoice). The invoices will be returned to the individuals concerned in due time.
Requests by individuals should be grouped, in a single annual submission by the institutions employing them. Individuals about to leave Switzerland permanently may, however, submit their final requests prior to departure through their institution.
Rates of VAT
There are three VAT rates (valid as of 01.01.2024):
- Standard rate: 8.1% on supplies of goods and services.
- Reduced rate: 2.6% on foodstuffs, cattle, poultry, fish and other animals intended for human consumption, grains, animal feed and bedding, medication, newspapers, magazines, printed or electronic books, etc.
- Special rate: 3.8% for the accommodation services (overnight stays and breakfasts).
Important remarks
VAT forms must bear the institution's official seal and the signature of an authorised person in the original.
Staff members are exempt from VAT for the extent of their employment in Switzerland. The period of validity mentioned in the legitimation card does not constitute a right. The status of spouses and children is normally the same as that of the principal beneficiary (the person employed to perform official duties).
If VAT privileges are abused, Swiss authorities reserve the right to respond with whatever measures are necessary and in accordance with current diplomatic practice.
The back of each form contains important information for the supplier. It describes precisely the procedure that the supplier must follow in order to grant VAT exemption at source. It is therefore essential that the forms are presented to suppliers in both front and back format. It may be necessary for those entitled to exemption to draw the supplier’s attention to this procedural requirement.
