Tax: Switzerland

Switzerland levies no sales tax but Value Added Tax (hereinafter “Swiss VAT”) on taxable supplies. A sale or lease of an aircraft delivered in Switzerland or positioned from Swiss customs territory to the place of delivery is subject to Swiss VAT unless an exemption applies.  

Although located in the heart of Europe, Switzerland is not a member of the EU and neither part of the EU’s customs or VAT union. Thus, EU taxes must be dealt with separately from the ones applicable in Switzerland. 

A sale of an aircraft in Switzerland for export is, as a rule, Swiss VAT-exempt, but the seller must prove such export which usually requires Swiss customs export clearance and other evidence supporting the removal of the aircraft from the Swiss customs and VAT territory. 

Export of a Swiss imported aircraft from Switzerland usually does not trigger any taxes or levies, provided that all non-Swiss maintenance incurred since the import has been accounted for Swiss import VAT. However, a Swiss seller (if an aircraft is sold for export) or a Swiss owner (if an aircraft definitively leaves Switzerland in course of a temporary admission procedure) must obtain a proof of export out of Switzerland or it will be liable to pay Swiss VAT at the current rate of 7.7%. 

As mentioned above, Switzerland is not a member of the EU and import into Switzerland must be dealt with separately from the EU import.  

Swiss import: the import of an aircraft into Switzerland is subject to Swiss import VAT of currently 7.7% and Swiss custom duties; however, Swiss customs duties may be avoided under an end use relief system applicable to civil aircraft provided timely application is filed by the importer (i.e. the party that is in control of the aircraft after its import). Furthermore, the Swiss customs authorities thereby generally apply a substance over form approach and Swiss import VAT and Swiss custom duties applies if a Swiss resident has factual control of an aircraft (irrespective of the aircraft’s nationality) flying into Switzerland, unless the Swiss resident meets all requirements stating an exemption in specific circumstances. The Swiss VAT Act grants an exemption from Swiss VAT if the Swiss recipient is engaged in commercial air transport business and the aircraft is used exclusively in that business. 

Temporary admission (hereinafter “Swiss TA”): an aircraft as a foreign good is entitled to the benefits of the Istanbul Convention and the reliefs provided by the Swiss customs law regarding the temporary admission of such foreign good in Switzerland, provided, however, that all of the following conditions are met: 

If any of these conditions are not met there is a substantial risk that the aircraft will be subject to Swiss import VAT based on its actual value and to Swiss custom duties as of the first flight into Switzerland. 

There is no Swiss stamp tax payable on aircraft transaction documents.

There are no particular Swiss taxes or duties applicable on registering the aircraft in Switzerland. However, registration fees for aircraft registration, mortgage registration and Swiss transport licenses etc. apply. In addition to that, the entry in the Swiss Aircraft Registry usually requires evidence of its customs clearance and the import of the aircraft into free circulation in Switzerland, unless the Swiss Customs Authorities grants an exemption of such import requirement (see section 5 above). 

No, there are none.

For tax considerations, distinctions between finance, dry and wet leases (ACMI) have to be made: 

See sections 1, 5 and 8 above.

See sections 1, 5 and 8 above.

Interest paid by a Swiss resident borrower are in principle not subject to Swiss federal withholding taxes of 35% unless a debt is qualified as a bond, debenture or bank deposit for Swiss withholding tax purposes. Furthermore, non-Swiss resident recipients of interest on loans secured by mortgage are not subject to federal and cantonal withholding taxes, unless the loan is secured by Swiss real estate.  

Due to the so-called “stop-the-clock” derogation by the EU, flights from and to third countries (such as Switzerland) are, at least for the time being, exempted from the European Emission Trading Scheme (EU ETS), pursuant to which aircraft operators are required to issue compensate emission by allowances for all flights that take off and land in the European Economic Area (EEA, EU member states, plus Iceland, Norway and Liechtenstein). However, since 2018 Swiss legislation requires aircraft operators to monitor and report emissions for domestic flights and flights from Switzerland to EEA Member States, with the aim to have the EU and Swiss emissions trading schemes linked. Switzerland plans to integrate aviation emissions into its own scheme after the two systems have become formally linked, a process that is still ongoing. In the meantime, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) has been implemented by the International Civil Aviation Organization (ICAO). Under CORSIA, from 2019, aircraft operators of all ICAO member states (incl. Switzerland) must monitor and report their emissions on international flights and from 2021, aircraft operators will have to compensate for a part of their CO2 emissions by purchasing and cancelling CO2 emission units. How the EU intends to integrate aviation into the EU ETS after 2020 and how a potential interaction with CORSIA could be structured has yet to be decided. 

In general, there are no particular cargo, airport or passenger taxes levied in Switzerland. However, at various airports in Switzerland, a passenger tax is levied, and the landing charges payable include a component dependent on the noise generated by the aircraft. To this end, aircraft are broken down into noise classes. Furthermore, in line with the EU recommendations (also known as recommendation ECAC 27/4) ECAC, there are charges levied depending on the absolute amount of NOx emissions. 

Switzerland levies mineral oil taxes on aviation fuels. However, airlines and other commercial aircraft operators are exempt from such mineral oil taxes if certain conditions are met. 

None.