The Swiss Federal Tax Administration recently approved for the first time a public key infrastructure solution which satisfies the formal documentation requirements of Swiss value added tax (VAT) law. In particular, electronic invoices may now be used as evidence for the deduction of input tax if their transmission and recording is secured by means of such electronic signatures.

The legal basis for the acceptance of electronic documents for VAT purposes was established on March 1 2002, when the Ordinance of the Swiss Federal Department of Finance on Electronically Transmitted Data and Information entered into force. In implementing the relevant provisions of the Swiss Federal VAT Law, the ordinance provides that electronic documents shall have sufficient probative force for VAT purposes if they are secured by a digital signature which conforms to the Federal Ordinance on Electronic Certificates. Among other things, the Ordinance on Electronic Certificates requires that (i) the digital signatures be created by a private key and controlled by a public key, and (ii) the identity of the owner of the private key be verified by an electronic certificate issued by an approved certification authority.

However, no certification authority approved under the ordinance currently operates in Switzerland. Therefore, a transitional clause in the Department of Finance's Ordinance on Electronically Transmitted Data provides that certificates may be accepted if it can be proved that the relevant service provider satisfies the requirements of the Ordinance on Electronic Certificates, even if the relevant service provider is not approved under that ordinance. Foreign service providers are deemed to satisfy these requirements if they are approved in their home country and if the applicable legal framework is equivalent to the standards of the Ordinance on Electronic Certificates.

A German service provider has now succeeded in obtaining approval from the Federal Tax Administration under this transitional provision. It has appointed a Swiss partner as registration agent whose clients may obtain the certificates and the public key infrastructure.

For further information on this topic please contact AndrĂ¡s Gurovits or Thomas Meili at Niederer Kraft & Frey by telephone (+41 1 217 1000) or by fax (+41 1 217 1400) or by email ([email protected] or [email protected]).