Exemption at source from value added tax (VAT) for permanent missions (PM), international organisations (IO) and their members of personnel who enjoy diplomatic status
Additional information
The Website of Swiss Federal Tax Administration (Main Division of VAT) provides additional information, for example specimen of the exemption form and the legitimation cards of the persons entitled to be exempted from VAT.
On request of the Main Division of VAT, the Swiss Mission, by circular verbal note, gave in 2014 additional information regarding the exemption of VAT and the procedure for exceptional requests for reimbursement (the verbal note is available in the chapter “Documents” below).
Principle
The permanent missions and international organisations (hereinafter referred to as “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).
Heads of mission (PM), diplomatic agents (PM), members of the senior management (IO) and high ranking officials (IO) (with "B" or "C" legitimation cards) 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). The same is applicable to members of their families admitted to Switzerland for the purpose of reuniting families and enjoying the same status as the principal beneficiary (with "B" or "C" legitimation cards, or Ci permits obtained in exchange for "B" or "C" legitimation cards), hereinafter referred to as “persons”.
Members of personnel (PM/IO) with a legitimation card "D", "E", "G", "H", "I", "L", "P", "R" or "S", staff members (PM) (holders of temporary or permanent - B or C residence permits), as well as their family members, and Private Household Employees (with a legitimation card "F") are not exempt from VAT.
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 the institutions with which the individual is associated).
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 (Swisscom or other 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 Federal Tax Administration (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
Only persons enjoying diplomatic status (holders of a "B" or "C" legitimation card and family members who hold a "B" or "C" legitimation card or who have exchanged these for a Ci permit) may be exempted from the payment of VAT. Eligible persons must show their personal "B" or "C" legitimation cards 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 (Swisscom or other 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.
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 Federal Tax Administration (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 the institution employing them.
Rates of VAT
There are three VAT rates (valid as of 01.01.2018) :
- 2,5% on food products and beverages (with the exception of alcoholic beverages), medicine, newspapers and other publications, seeds and plants, animal food and litter, radio and television services and piped water;
- 3,7% on accommodations (overnight stays and breakfasts);
- 7,7% on all other supplies and services subject to taxation.
Important remarks
The forms for VAT exemption at source (A, AA, B, BB) and the forms requesting exceptional reimbursement of VAT (C, D) may be obtained from the Swiss Mission (see details below). They are available in three Swiss official languages: French, German and Italian. It is recommanded to deliver the forms to the supplier in the spoken language of the region.
Institutions must ascertain that the forms are kept in a safe place. Swiss authorities reserve the right to take all necessary measures in the event that unauthorised persons use them.
The above-mentioned beneficiaries 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.
If VAT privileges are abused, Swiss authorities reserve the right to respond with whatever measures are necessary and in accordance with current diplomatic practice.
Although the forms can be photocopied (recto-verso), neither suppliers nor the Federal Tax Administration will accept photocopies of official seals and signatures.
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 indispensable, therefore, that the forms be photocopied recto and verso. It may be necessary for those entitled to exemption to draw the supplier’s attention to this procedural requirement.
