The Federal Council has repealed the Federal Department of Finance's (FDF) Ordinance on Electronic Data and Information (ElDI-V) of 11th December 2009 with effect from 1st January 2018. This facilitates digital accounting as well as the deduction of input tax.

To date, the Federal Tax Administration (FTA) has had quite a formalistic approach. While it was common practice in the rest of Europe for PDF documents alone to be sufficient for the deduction of input tax, Switzerland insisted on retaining the electronic signature. Documents without this electronic signature could be considered as invalid within the context of a VAT audit. This not only complicated the administrative burden on companies, but also in some instances, burst their repositories. After all, the retention period of at least 5 years still remained. In an internationally active company, folders containing the original invoices alone could already get out of hand.

This obstacle has now been overcome. The FTA now accepts electronic archiving and no longer requires an electronic signature as strictly necessary. To be on the safe side, the electronic signature can continue to be used in future as it continues to offer the highest protection from unascertainable changes thereby guaranteeing proof of origin, proof of integrity and the non-repudiation of sending and receiving. As of 1st January 2018, this evidence can be provided regardless of the format (so-called Freedom of Evidence), if the principles of proper accounting were complied with in accordance with Article 957a CO. This means that in Switzerland, in future, scanned paper invoices and electronic invoices will now also be equivalent to conventional paper invoice.

What does this mean for my company?

As of 1st January 2018, scanned invoices may be used to claim input tax deduction, provided that they can be made available in a readable form at any time. This is a significant relief for companies, since PDF invoices are regularly sent by email. The risk of set off to asserted input tax due to insufficient evidence in the context of a VAT audit is thereby significantly reduced.

What do I have to think about?

Provisions regarding accounting in accordance with Articles 957 to 958f of the CO and the Swiss Business Records Ordinance (GeBüV) must be complied with. An invoice must be kept for each order, either on paper or in an electronic or comparable format to ensure a clear understanding of the underlying facts. Furthermore, all business transactions must be recorded completely, truthfully, and systematically.

Originally published December 21, 2017

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