The VAT Revision - Part 4: Margin Scheme for Artwork, Collectibles, and Antiques

The value-added tax (VAT) in Switzerland is undergoing a complete revision. The first part of the revision has been in effect since 2010. Now, the second part will follow on January 1, 2018. This leads to significant changes in some areas. According to the Federal Council, 30,000 new VAT registrants are expected. Findea explains in a four-part series of articles how the VAT revision came about and what the main changes are. The first article illustrated why the VAT revision is so important. The second article, explained the changes that the VAT revision brings for foreign companies. The third article outlined the changes for the community and for electronic newspapers and books. This last article will present the margin scheme taxation for works of art, collectors' items, and antiques.

With the introduction of the VAT Act, the margin scheme was abolished. The VAT revision now reintroduces it with slight adjustments to the requirements. However, this is only for works of art, collectors' items, and antiques. Specifically, this will be regulated in the new Art. 24a VAT Act. The aim of this is to avoid under-taxation of such items.

Items that came on the market before 1995 were not subject to VAT at the time. According to current law, however, a notional input tax deduction can still be made for them. This means that the federal tax administration loses considerable amounts annually. Specifically, the reintroduction of the margin tax is expected to lead to annual additional revenue of around 30 million Swiss Francs.

Although the new regulation is based on the old ones, there are also important changes. For instance, a loss offset with the taxable turnover will be possible.

Findea helps you keep your taxes simple and unproblematic.

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