Swiss company with production and distribution in the EU.
April 5, 2022 | 120,00 EUR | answered by Steuerberater Bernd Thomas
A cosmetic company in Switzerland produces all products in France through a third-party company. This company delivers the finished packaged products to a fulfillment company in Germany for customers in the EU (private, retail, wholesale) and also delivers directly to the company's headquarters in Switzerland, from where the Swiss market is served. What needs to be considered regarding VAT and profit taxation?
Dear questioner,
I am happy to answer your inquiry based on the information you provided in the context of an initial consultation on frag-einen.com. The response is based on the factual information you provided. Missing or incorrect information can affect the legal outcome.
I will provide you with the respective provisions of the German Value Added Tax Act. The VAT law is harmonized in Europe and is essentially the same, but regulated by national provisions. The European legal basis is the Value Added Tax System Directive.
In general, the place of supply will be where the delivery to the customer begins (under German VAT law § 3 para. 6 UStG), in the case of distance selling (under German VAT law § 3c UStG) it will be where the goods are located at the end of the delivery to the acquirer. Tax exemptions may apply for intra-Community supplies or exports.
Therefore, a tax registration for VAT purposes in the EU will be required. For distance selling businesses, you may be able to use the simplified OSS procedure.
Fulfillment partners will usually require proof of your tax registration.
The taxation of profits (corporate income taxation) is to be assessed according to the applicable double taxation agreement, and it should also be distinguished whether a corporation (GmbH or similar) or a natural person or partnership is operating.
Generally, taxation will occur at the location of the company's seat or management, but may also be taxed at the location of a permanent establishment (branch office, facility, etc., usually a fixed establishment, details are regulated in the respective double taxation agreements and national tax law). In many cases, profit taxation may therefore be in the country of the company, in your case in Switzerland.
It is recommended that you engage a fiscal representative for the EU, a tax consulting firm, etc. Chambers and associations can provide helpful support (Chambers of Commerce, etc.). Your trustee in Switzerland should also be able to at least facilitate contacts.
Best regards,
Bernd Thomas
Tax consultant
Information according to DL-InfoV: Tax consultant Dipl.-Kaufmann (FH) Bernd Thomas, Tax consultant, Franklinstraße 15, 30177 Hannover, member of the Tax Consultants Chamber of Lower Saxony, membership number 146580, professional liability insurance with R+V Allgemeine Versicherung AG, Mittlerer Pfad 24, 70499 Stuttgart, insurance sum: 250,000 euros for each individual claim; annual maximum benefit: 1,000,000 euros (for all damages in an insurance year); the professional regulations apply, in particular the Tax Consultancy Act (StBerG), Implementing Regulations to the Tax Consultancy Act (DVStB), Professional Code (BOStB), Tax Consultant Fee Ordinance (StBVV) (regulations can be viewed at: https://www.berufsrecht-handbuch.de/, http://www.gesetze-im-internet.de/stberg, www.gesetze-im-internet.de/stbvv/), the professional title of tax consultant was awarded in the Federal Republic of Germany.
