Electronic invoice in Switzerland

In Switzerland, electronic invoicing is an important part of the digital transformation and is promoted by authorities to make invoicing more efficient and transparent. The legal basis for electronic invoicing in Switzerland includes both tax laws and regulations for electronic communication.

1. Value Added Tax Act (MWSTG)

The Swiss VAT Act (MWSTG) forms the foundation for the tax recognition of electronic invoices and sets out the conditions under which electronic invoices can be used for VAT purposes. There are no specific regulations for electronic invoicing as opposed to paper invoices, but the law ensures that the requirements for authenticity and integrity of the invoice data are met.

• Article 28 MWSTG: This article regulates the general requirement for the issuance of invoices needed for VAT deduction. The provisions of the law also apply to electronic invoices.
• Article 30 MWSTG: This article regulates the invoicing requirements and states that electronic invoices must meet the same tax requirements as paper invoices. Specifically, they must correctly include details about the issuer’s identity, the description of the service, and the VAT amount.
• Article 69a MWSTG (since 2020): This article introduces specific requirements for electronic invoicing, emphasizing that an electronic invoice must meet the same requirements for traceability, integrity, and authenticity as paper invoices to be accepted for VAT deduction.

2. Regulation on Electronic Invoicing (e-Invoice Regulation)

Switzerland has introduced a specific regulation for electronic invoicing to ensure the efficient and secure transmission of invoices. This regulation addresses the requirements for electronic communication between businesses and the government as well as the technical requirements for electronic invoices:

• e-Invoice Regulation: Introduced in 2021, this regulation governs the requirements for electronic invoicing in business transactions, especially with public administration. It states that electronic invoices have the same legal status as paper invoices, provided they meet the authenticity and immutability requirements.
• Technical Requirements: The regulation mandates the use of the Peppol standard for the exchange of electronic invoices between businesses and public administration. Companies doing business with the government must submit their invoices through this central system to ensure the legality and integrity of the data.

3. Regulation on the Archiving of Electronic Documents

The archiving of electronic invoices in Switzerland is subject to the general archiving obligations for electronic documents:

• Archiving Requirements: According to Article 957, paragraph 1 of the Swiss Code of Obligations (OR), companies are required to keep their business records, including invoices, for 10 years. This applies to both electronic and paper invoices.
• Security Requirements: Electronic invoices must be archived in such a way that they remain unaltered and traceable. This means they must be kept in a readable and integrity-secured format, which can be ensured in practice through the use of digital signatures or specialized archiving systems.

4. Electronic Signature and Integrity

The electronic signature plays an important role in ensuring the authenticity and integrity of electronic invoices in Switzerland:

• Electronic Signature: A qualified electronic signature is recommended to guarantee the authenticity of the invoice and the immutability of its contents. There is no legal requirement for a signature in electronic invoicing, but it is recommended, especially in cross-border transactions or when additional legal protection is required.
• eIDAS and Certificates: Switzerland follows the principles of the EU eIDAS Regulation, which regulates electronic identification and trust services. This facilitates the secure exchange of electronic documents both within and outside of Switzerland.

5. The Peppol System

Switzerland implements the Peppol standard for the exchange of electronic invoices between businesses and public administration:

• Peppol (Pan-European Public Procurement On-Line) is an open network that enables the exchange of invoices and other documents in a standardized XML format. Since the introduction of the e-Invoicing law, the use of Peppol is mandatory for transactions between businesses and the government.
• E-invoices for the Public Sector: All businesses that issue invoices to public administration must use the Peppol network. Invoices are sent through the Peppol platform and undergo a standardized process that ensures the security and transparency of the transactions.

6. Tax Filing and Integration into Administrative Systems

The Swiss tax administration has developed a system to integrate electronic invoices into tax filings:

• Integration into Tax Filings: Electronic invoices submitted through the Peppol system can be automatically integrated into tax filings, simplifying the accounting process and making tax collection more efficient.
• The integration into the VAT (MWST) declaration occurs through the electronic exchange format and supports the automated processing of tax data.

7. Penalties and Compliance

As in many other countries, compliance with the regulations for electronic invoicing and archiving is mandatory in Switzerland:

• Penalties for Violations: Companies that fail to meet archiving requirements or issue incorrect invoices can be fined. If invoices are not transmitted correctly (especially in the public sector), this can lead to penalties and delays in payment.
• Companies are also expected to be responsible for their electronic infrastructure and invoicing software and ensure that these comply with legal requirements.

8. Summary of Key Legal Foundations in Switzerland

• VAT Act (MWSTG): Electronic invoices must meet the same requirements for authenticity and integrity as paper invoices to be recognized for tax purposes.
• Regulation on Electronic Invoicing: Regulates the requirements and technical framework for electronic invoicing, particularly in the public sector.
• Archiving Requirements: Electronic invoices must be archived for at least 10 years.
• Peppol System: The use of the Peppol standard is mandatory for exchanging invoices between businesses and public administration.
• Electronic Signatures: Recommended to ensure authenticity and integrity but not required.
• Penalties for Non-Compliance: Companies must ensure that they meet the legal requirements for electronic invoicing and archiving, otherwise, penalties may apply.

Conclusion:

In Switzerland, electronic invoicing is legally recognized and increasingly becoming mandatory in the public sector. Companies dealing with public administration must use the Peppol network. Similar requirements to paper invoices apply for tax filing and archiving, and specific technical standards must be met to ensure the authenticity and integrity of electronic invoices.