In order to claim the input VAT deduction on purchases, a tax payer has to prove authenticity and integrity of the document in question, irrespective of whether it was received on paper or electronically. In the past, for electronic invoices, this required the use of an advanced electronic signature. This applied despite the free consideration of evidence, which was introduced into the VAT legislation in 2010 and states that input VAT can be deducted if the taxable person can prove that he paid the VAT.
The rule requiring businesses to use electronic signatures triggered additional costs and increased the complexity of the process. In addition, internationally active Swiss companies had limited understanding for this requirement, as few other jurisdictions had similar rules. In particular, the European Union expressly foresees a variety of – alternative – controls and measures to guarantee authenticity and integrity.
After months of discussions and negotiations with major corporate groups, the Federal Tax Administration finally acknowledged that more flexibility is required: On 29 September, it published a statement, abolishing the requirement for the advanced electronic signature.
Formally, life got easier. However, you need to bear in mind that authenticity and integrity still need to be guaranteed – there is just more flexibility in how this can happen. More to the point, the Federal Tax Administration expressly requires the “principles of proper accounting” to be maintained. Under those, additional measures and controls need to be in place that ensure that an invoice cannot be altered during processing.
In addition, businesses should also be aware that the rules for e-archiving remain unchanged. Accordingly, invoices still need to be archived in accordance with the Code of Obligations and its Ordinance on the Maintenance and Retention of Accounts.