Expiration date exist not only on Chocolate, Milk ...but also on Value Added Tax (VAT) in 🇨🇭
Recently we received an interesting email Magaly MALVAREZ from Loralie SA describing the Swiss way to decide the Tax Rate.
We found it interesting, especially for our customers doing business in Switzerland, so we want to share you some extracts from it :
"In Switzerland, you know that we vote for everything. And every "votation" has a purpose and a start date and a stop date. Meaning that there is a deadline.
For example, one project will start on the 1st of January 2022 and will last 20 years, meaning the end of the taxation period will be 31st of December 2042.
If there is a tax linked to this project, it will end at the same time.
That means that if the government wants to change the expiration date, to have a longer period for example to accomplish the project, they must make the people vote AGAIN.
In 1993 the Swiss decided to go for the VAT system with an initial rate of 6.5%.
Since then, people voted for new projects to be financed by the VAT, so the VAT rate ramp up to 7.6% then 8% in 2011
The jump between 7.6% to 8% was to finance the disability - insurance, with an expiration date of end 2017.
The government wanted to extend the taxation period… so the Swiss had to vote again!
This time they voted NO, so it would have gone back to 7.6%.
But at the same time, the Swiss voted YES to renovate the transportation network by train, meaning a VAT increase of 0.1% until the end of 2030.
That’s why we end up today with a VAT rate of 7.7%. (8 - 0.4 + 0.1= 7.7). Until the 31st of December of 2030!
This shows you how Swiss democracy is working. Citizens decide what is best for all and agree to follow the majority. And rules are followed per the book.
The Swiss spirit is particularly important to have a predictable and stable environment to facilitate the growth of all businesses"
The good news is that this is extremely easy for our customers to setup this in their Kinetic Epicor solution.
We hope this information will interest you as it has interest it us.