Principles governing representation in Swiss VAT matters

Direct representation

In tripartite relationships, the situation can be complex. It may happen that someone (the representative) acts in the name and on behalf of another person (the person represented). In such a context, it can be accepted that the supply takes place between the recipient and the person represented, provided that the representative acts as such and can clearly communicate the identity of the person represented.

Furthermore, the representation relationship must be expressly brought to the attention of the recipient, or this relationship may also arise naturally from the circumstances, so that the recipient can realise that the representative is acting in the name and on behalf of the person represented. If these conditions are actually met, it will be a case of direct representation, and the supply will be considered as performed between the recipient and the person represented. The turnover resulting from this contractual relationship will therefore be attributed to the person represented.

Indirect representation

If the elements described above are not realised, the situation will be qualified as indirect representation.

In this case, two simultaneous and independent supplies will take place: the first, between the person represented and the representative, and the second, between the representative and the recipient.

Unlike the direct representation described above, the representative will be allocated the income related to the contractual relationship with the recipient. From the representative’s perspective, the supply provided to the person represented may possibly be deducted as a necessary acquisition for the provision of its own services. However, it will not be taken into consideration in the context of the turnover calculation for an eventual VAT registration.

The fundamental difference between direct and indirect representation therefore lies mainly in the turnover allocable to the representative.

New attribution rules applicable to digital platforms

New art. 20a VATA was introduced effective 01 January 2025. All transactions made from 01 January 2025 via electronic platforms are potentially affected by these new regulations. 

The fiction of art. 20a VATA implies that, in the context of deliveries of goods via electronic platforms, it is now the operator of the platform who will systematically be attributed the supply, in derogation of the general principles relating to the representation of Art. 20 VATA.

Accordingly, everything will happen as if two successive deliveries took place: the first between the initial supplier of the goods and the platform (delivery 1); and a second between the operator of this platform and the end customer (delivery 2), in a manner analogous to indirect representation.

Based on these rules for the allocation of a supply, online platforms could potentially encounter new obligations regarding Swiss VAT, especially the conditions for mandatory Swiss VAT registration. This was not necessarily the case previously, particularly if sellers were considered to be the real providers of supplies (direct representation).

Although, sellers who exclusively make supplies in Switzerland through electronic platforms should no longer be subject to VAT (subject to the derogation regimen). Registration on a voluntary basis remains nevertheless possible.

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Sandrine Bonvin is the Swiss VAT expert at FIDAG, and passionate about the topic. She is a director and partner in the Geneva office of FIDAG.