18 October 2021

Swiss VAT – Irrevocable Fixed Interest Trusts

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The Swiss VAT treatment is to be reviewed due to more detailed rules for Irrevocable Fixed Interest Trusts.

On 5 October 2021, the Swiss VAT Authority issued the draft of the revised guidance on the Swiss VAT treatment of trusts and foundations (“Draft”).

In contrast to the current valid version of the guidance, the new draft contains much more details regarding the Swiss VAT treatment of Irrevocable Fixed Interest Trusts. The Draft specifies the scenarios in which the beneficiaries are to be considered and which elements of the trust deed are relevant, and which are not.

The next steps are that interested parties can comment on the Draft and the Swiss VAT Authority will publish the final version of the revised guidance after reviewing these comments.

Actions: Although individual details of the Draft could still be changed, it can be assumed that the new Swiss VAT regulation will be more detailed than the old regulation with regard to Irrevocable Fixed Interest Trusts. Therefore, in practice, it will be necessary for banks providing services to trusts to review the documentation of all Irrevocable Fixed Interest Trust clients and reassess them for Swiss VAT purposes.

We will be happy to provide you with more information and support you in the processing.