The Swiss people firmly rejected the ‘No Billag’ initiative on 4 March 2018. As a result, all VAT Register-listed businesses with an global turnover of more than CHF 500,000 will have to pay a business licence fee, regardless of whether or how much TV and radio they actually receive. As the fee is linked to inclusion in the VAT Register and the company’s global revenue is taken into consideration, the maximum fee of CHF 35,590 may vastly exceed the VAT incurred in Switzerland.
The business fee from 1 January 2019
From 1 January 2019 all VAT Register-listed businesses with a global turnover of more than CHF 500,000 must pay not only VAT to the FTA, but also the licence fee, as per Article 70 of the Radio and Television Act (RTVG). This is assessed according to the company’s global revenue, and the VAT classification is not a factor in the calculation. The fee is graded as follows:
The regulation on the RTVG sets out several options for corporations to reduce the licence fee. If several companies apply group taxation in the sense of Article 13 of the VAT Act, the aggregate turnover of the VAT group is used in the assessment, so that only one fee is payable. In addition, a corporate fee group may be constituted by combining at least 30 businesses. In this case, too, only one fee is payable based on the consolidated revenue. The same principles apply for formation, changes in the composition and dissolution of the group as for group taxation.
As the business levy is linked to inclusion in the VAT Register, foreign businesses are liable for the fee, even if they are registered in Switzerland without a presence (i.e. a permanent establishment) for installation services or for the rendering of electronic services. As the reference point is the global revenue, minimal revenue in Switzerland may still trigger the business fee up to the maximum of CHF 35,590. It would be welcome if the Federal Office of Communications (OFCOM) were to investigate whether exemptions from or restrictions on the duty to pay the fee should be created for such companies.
Summary and recommendation
As every business listed in the VAT Register is liable for the fee, corporate groups should now review their consolidation options and perhaps opt for group taxation, even if this has not proven beneficial from a VAT perspective.
Bildquelle: Rudis-Fotoseite.de / pixelio.de