Swiss eases VAT Requirements for non-resident companies
No More Security Deposits, and Potential End to Fiscal Representation
In a significant shift aimed at reducing administrative burdens on nonresident businesses, the Swiss Federal Tax Administration (SFTA) has eliminated a long-standing requirement for foreign VAT-registered companies to provide security deposits. This change, announced in updated guidance to VAT Info 22 – Foreign Companies on 29 April 2025, marks a major step toward simplifying Swiss VAT compliance for international businesses.
Read more background in our Swiss VAT guide.
Ending security deposits for non-resident VAT Registrants
Historically, foreign companies registering for Swiss VAT were required to provide a security deposit—either in the form of a bank guarantee or a cash deposit. This deposit was calculated based on the company’s estimated annual taxable turnover and served as a financial guarantee for the payment of VAT liabilities.
Under the new practice, however, the SFTA has waived its right to request such securities. As a result, foreign companies registering for VAT in Switzerland will no longer need to set aside significant financial resources just to meet compliance requirements.
This change applies immediately and across the board. The SFTA has already begun returning existing security deposits—both cash and bank guarantees—to affected taxpayers. Due to the high volume of affected companies, these refunds are being processed in batches, and the administration is currently analyzing each case individually to determine the appropriate reimbursement amount.
Reclaiming existing deposits
Although the updated guidance specifies that individual requests to expedite reimbursements will not be considered, foreign taxpayers may still wish to submit a written request to formalize their right to a refund. Doing so could strengthen their position if delays become unreasonable, especially if they intend to pursue compensatory interest, even though the guidelines do not explicitly provide for it.
However, it’s important to understand that the SFTA reserves the right to withhold or later request a security depositif a taxpayer fails to comply with Swiss VAT procedural obligations. Full compliance remains essential to maintain the benefit of this policy shift.
Fiscal Representation may soon be optional
In addition to the removal of the security deposit requirement, recent amendments to Swiss VAT law, effective 1 January 2025, have opened the door for a further simplification: the potential waiver of the fiscal representative requirementfor foreign taxpayers.
Currently, foreign companies without a place of business in Switzerland are generally required to appoint a Swiss fiscal representative to manage their VAT obligations. However, the revised law grants the SFTA the discretion to waive this requirement—provided that the foreign taxpayer can demonstrate that VAT obligations can still be met efficiently and enforcement of the law remains unaffected.
So far, this waiver has only been applied in practice to foreign marketplaces, as defined in the VAT law. For all other types of foreign companies, the appointment of a fiscal representative is still required. Nevertheless, this change signals a broader trend toward flexibility and administrative streamlining.
