The Importance of VAT Compliance for Swiss Companies - Assuring VAT Compliance for a Transportation Start-up Company
Value added tax (VAT) is probably known to everyone and we encounter it on a daily basis. Although its basic system is simple in principle, its application in practice is complex. Neglect or failure to declare VAT can have serious consequences. This makes VAT compliance even more important.
Graf Reto & Thut Marco, 2020
Bachelor Thesis, confidential
Betreuende Dozierende: Jacqueline Haverals
Keywords: VAT, subsequent declaration, legal aspects, organizational aspects
A start-up company, which is active in the transport of mineral oil, has neither made a VAT declaration nor registered as a VAT taxable person since the beginning of its business activities at the start of 2019, despite monthly sales of around CHF 30'000.00. The company did not take enough care of administrative matters, which meant that, in addition to accounting, the company also neglected to deal with the VAT issue. 100% of the firm's revenues are generated in Switzerland by a cooperation with a well-known petrol merchant.
In order to obtain a precise overview of the business field of the transportation start-up company, first the legal basis and literature on value added tax were analyzed. Due to the complexity of the VAT law and its comprehensive interpretation, focus was placed on the relevant law articles for the business situation of the client. The company's business activities were analyzed by means of bank statements and the documents provided. By combining the legal articles with the business environment of the start-up company, the necessary steps towards VAT compliance could be implemented.
It has been established that the customer is clearly and without any doubt to be classified as a taxable person for VAT purposes. In other words, all four decisive criteria were met in order to be considered a person liable to VAT, and the turnover limit of CHF 100'000.00 was exceeded. Furthermore, all services provided by our client are taxable at the conventional VAT rate of 7.7%. There are no exempt revenues. The effective method and the consideration collected were chosen for the type of settlement.
The benefits for the customer from this Bachelor thesis can be divided into two parts. On the one hand, the past, where it is primarily a matter of subsequently declaring the old and due VAT periods in order to comply with legal obligations. The second is the future, for which a reliable and established accounting program has been set up and is recommended to the client. This allows the client to comply with the legal obligations in a relatively simple way.
Studiengang: Business Administration International Management (Bachelor)
Fachbereich der Arbeit: Accounting, Banking, Controlling and Finance