Swiss VAT is due to be reviewed by the Swiss Legislature due to more specific rules for Irrevocable Fixed Interest Trusts.
On October 5, 2021, the Swiss VAT Authority issued draft revised guidelines for the settlement of trusts and foundations in Switzerland (the "Draft").
In complete contrast to the current version of the guidelines, the latest draft contains much more detail on how Swiss VAT is charged on Irrevocable Fixed Interest Trusts. The draft specifies in detail the scenarios in which beneficiaries are to be considered and which elements of the trust deed are VAT relevant and which are not.
The next steps will be that all interested parties can comment on the draft, and the Swiss VAT office will publish the final version of the revised guidelines after reviewing these comments in detail.
Actions: Although the details of the Project may still change, it can already be assumed at this stage that the new Swiss VAT regulation will be more detailed than the current legal architecture in relation to Irrevocable Fixed Interest Trusts. Therefore, in practice, banks in Switzerland that provide services to trusts will be required to review the records of all clients of Irrevocable Fixed Interest Trusts and reassess them for Swiss VAT.
We will be happy to provide you with more information and support in the field of VAT settlement in relation to Irrevocable Fixed Interest Trusts.
