VAT - What is the benefit of using the declaration procedure? (Article 38 VAT Act)
The main advantage, really the big advantage of using this procedure is really of a financial nature, that is to say in order to avoid having to immobilize or avoid the flow of money which can have a strong impact on the cash flow. -flow). Example: A building is sold for CHF 10,000,000 with VAT. In a classic case, the seller (alienator) will have to send an invoice to the buyer for CHF 10,000,000 + VAT at 7.7%. This taxable delivery will have to appear as opted turnover in the VAT statement (figures 200 and 205). The buyer, for his part, will have to pay 7.7% VAT on the purchase of the building. This preliminary tax can then be possibly recovered in the buyer's VAT statement, depending on the use of the building that he makes of it (taxable turnover resulting from rentals with VAT or excluded turnover resulting from rentals without VAT). In this classic case, there will be a huge flow of money of CHF 770,000. - (= 7.7% VAT on C...