Cross-Border VAT: A Swiss SME’s Survival Guide

The moment a transaction crosses a border, VAT rules change. A simple framework helps you avoid the most common cross-border mistakes.

The place of supply

VAT is governed by where the supply is deemed to take place — the place of supply. For services, this is usually where the customer is established (B2B) or where the supplier is (B2C, with exceptions).

The place of supply is the anchor of cross-border VAT. It tells you which country can tax the transaction and therefore which rules you follow.

For B2B services the place of supply is generally the customer’s country, which is why reverse charge applies. You issue the invoice without your own VAT.

For B2C services the place of supply is often the supplier’s country, so your own VAT rules may apply. But there are many exceptions, so confirm the specific service before you invoice.

• Place of supply determines which country’s VAT applies.
• B2B services: usually the customer’s country.
• B2C services: often the supplier’s country.

Goods vs. services

Physical goods follow different rules from services — imports, exports and distance selling each have their own treatment. Do not apply service rules to goods.

Exported goods are typically exempt from Swiss VAT with the right documentation, while imports into Switzerland generally attract import VAT. The rules live in a different chapter from services.

Distance selling to EU consumers has registration thresholds that, once crossed, require you to register for VAT in the destination country. These thresholds change, so check current figures.

Track goods and services separately in your records. Mixing the two makes it nearly impossible to prove the correct VAT treatment in a review.

• Exports are usually exempt.
• Imports generally attract import VAT.
• Distance selling has registration thresholds.

Get expert help

A short consultation can map your exact obligations across the countries you actually serve. An hour of advice is cheaper than a penalty or a blocked registration.

Ask the advisor to document the treatment for each service and client type. A written note you can follow beats remembering a verbal explanation months later.

Revisit that guidance when your activity changes, such as adding a new country or selling goods. VAT obligations are not a one-time setup.

• Map obligations by country.
• Document the treatment in writing.
• Revisit when your activity changes.

Document everything

Keep evidence for every cross-border treatment you apply. VAT authorities ask for proof, and the time to gather it is before a review, not during one.

Store client VAT numbers, contracts, and any correspondence about the treatment together with the invoice. A complete file makes your position easy to defend.

Record why you chose a particular treatment for unusual cases. A one-line note at the time is worth a page of reconstruction later.

Use your invoicing software to enforce the right treatment per client, so a correct setup becomes the default rather than a decision you make under time pressure each month.