Telecommunications and electronic services to non-taxable recipients in Switzerland (e.g. hosting or online games)

A service is considered an electronic service if the following conditions are cumulatively met:

• It is provided via the Internet or another electronic network;
• it is provided automatically and human involvement on the part of the service provider is minimal;
• The provision of services is not possible without information technology.

According to Article 10 paragraph 1 of the VAT Ordinance, the following services are considered electronic services:

• Providing websites, web hosting, remote maintenance of programs and equipment;
• the electronic provision of software and its updating;
• the electronic provision of images, texts and information as well as the provision of databases;
• the electronic provision of music, films and games, including gambling games.

If such services are provided to non-taxable recipients in Switzerland, the foreign company must register in the Swiss VAT register and pay the VAT once the worldwide turnover limit of CHF 100,000 is reached.