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.  

Swiss VAT is charged to and payable by the buyer, but it is the seller who has to account for or has to pass Swiss VAT to the Swiss tax authority. The Swiss VAT standard rate is currently 7.7%.   

There are several exemptions from Swiss VAT available. For example, the delivery (sale or lease) of an aircraft to an airline that carries on commercially air transport and charter business and whose turnovers from international flights exceed those from domestic traffic (including refurbishment, maintenance and servicing of aircraft) are generally Swiss VAT–exempt. Furthermore, a domestic sale/purchase is exempt of Swiss VAT if the aircraft is exported from Switzerland after the closing without using the aircraft in Switzerland prior to the fly away; however, proper customs export documentation and other evidence of export is required. Another Swiss VAT exemption may apply under certain circumstances if a foreign registered aircraft is positioned to and delivered in Switzerland for a sale or lease transaction between foreign parties. Thus, Switzerland is often used as a place of delivery of foreign aircraft.   

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. 

N/A

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. 

N/A

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%. 

See above.

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: 

1. general requirements for Swiss TA: (a) the aircraft remains under the supervision of the Swiss Custom Authorities at all times during its stay in Switzerland; (b) the aircraft is owned by a non-Swiss resident entity or person; (c) the person or entity that is using the aircraft in a flight into Switzerland, or has the right to use the aircraft or has the factual control of the aircraft, is not a resident in Switzerland; (d) the aircraft maintains a non-Swiss habitual base; and 
2. for commercial use: (a) no domestic flights are allowed; and (b) the aircraft has to leave Switzerland, thus, terminate the temporary admission, within 1 to 2 days; or 
3. private use: the aircraft may remain in Switzerland for a period not exceeding six months in every period of twelve months. 

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. 

See above.

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

See above.

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: 

1. Finance lease: the Swiss VAT Act explicitly names only the sale and lease-back to be Swiss VAT-exempt without credit. However, provided certain conditions are met, alternative finance lease transactions can be Swiss VAT-exempt without input Swiss VAT credit, subject, however, to a written confirmation of the competent Swiss VAT Administration. By carefully drafting a lease agreement, a finance lease can qualify as taxable supply subject to Swiss VAT with input VAT credit, therewith avoiding the input VAT, including but not limited to Swiss import VAT, if any, to become a final cost. In cross border finance leases, provided that the leased aircraft will be predominantly used outside Swiss customs territory, the Swiss resident lessor may apply the 0% Swiss VAT rate and is still eligible to reclaim any input VAT, including Swiss VAT on the import, if any. 
2. Dry lease: a dry lease is a delivery, thus a supply potentially subject to Swiss VAT at 7.7% (please see further above for details and exemptions). 
3. Wet lease (ACMI-leases): a wet lease of an aircraft does not qualify as a supply of goods, but a transportation service rendered at the place where it was used. The place of such service is governed by the place of enjoyment rules, taking into account the effective use of the aircraft. However, cross border flights originating from or ending on Swiss territory are Swiss VAT-exempt at 0%.  

See above.

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.  

See above.

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.