Switzerland Supreme Court Clarifies VAT Obligations for Rental, Accommodation Services

The Swiss Federal Supreme Court Nov. 21 issued Decision No. 2C_563/2022, clarifying VAT obligations for rental and accommodation services. The taxpayer, a Swiss tenant company, sublet a chalet to its U.K. based parent company. The taxpayer invoiced the subletting to the parent company at a special VAT rate as accommodation services, whereas it didn’t invoice the stay of the family members of the beneficial owner. Upon inspection, the tax agency imposed an additional VAT liability on the taxpayer. The taxpayer appealed the agency’s decision, and then the administrative court’s decision. On its further appeal, the supreme court upheld that: 1) ...