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Accounting
David Merz | Founding Partner
Zurich, October 6, 2024
Understanding tax identification numbers in Switzerland and wider Europe is crucial for individuals and businesses navigating the country’s tax system. Each type of tax ID—whether the personal Tax Identification Number (TIN), the Company Identification Number (UID), or the VAT Identification Number (VAT ID)—serves a distinct purpose, ensuring proper tax compliance domestically and internationally. This article provides a comprehensive overview of these identifiers, their uses, and how they contribute to both administrative efficiency and international tax transparency in Switzerland.
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Tax identification numbers are essential for uniquely identifying individuals, companies, and other legal entities for tax and administrative purposes, and for the International Automatic Exchange of Information (AEOI).
While everything from a person’s address to their name can be legally changed, their tax identification number remains the same. This helps the authorities, both domestically and internationally, accurately track and assign relevant financial transactions to the right person or legal entity.
In Switzerland, there are three main types of tax IDs:
Each of these numbers serves a distinct role in Switzerland’s tax system. Let’s explore each of them in detail.
The steueridentifikation (Steuer-ID), or tax identification number (TIN), is a unique number assigned to natural persons residing in Switzerland, for administrative and personal tax purposes.
The primary purpose of the TIN is to uniquely identify individuals residing in Switzerland for tax reporting and various administrative processes related to pensions and social security. The TIN also helps facilitate smooth international automatic exchange of information (AEOI) and thus enhances global tax compliance.
Specifically, the TIN is used in the following contexts:
In Switzerland, the personal tax ID corresponds to a person’s social insurance (AHV) number. This is assigned to natural persons shortly after their birth if they are born and live in Switzerland, and never changes from that day forward.
Foreign-born nationals who become tax residents of Switzerland receive their tax ID when they register with the Swiss tax authorities.
As the tax ID remains the same throughout a taxpayer’s life, and corresponds to their AHV number, it can easily be found in the following ways:
The AHV number (or TIN) in Switzerland consists of 13 digits separated by three dots. It is structured as follows:
Here is an example of what the tax identification number looks like:
756.3210.9876.06
Where individuals are assigned a tax ID, companies and legal entities in Switzerland are assigned a uniform company identification number (UID). The UID is used to uniquely and permanently identify companies in all their interactions with authorities. Since 2011, this number has replaced all previous identification numbers used in public administration, such as the VAT number and commercial register number.
The UID is the universal identification number for businesses in Switzerland. It is used not only for tax purposes but across all national administrative and legal processes, making it a key component of a company’s interactions with Swiss authorities.
It serves multiple purposes, including:
In essence, the UID simplifies communication between businesses and the Swiss government by consolidating various identification systems under one unified number.
The UID is automatically assigned to all companies registered in any Swiss administrative register linked to the UID system. These registers include, for instance, the AHV compensation fund, the commercial register, and the VAT register.
The term “company” is broadly defined within the UID system, encompassing not only traditional businesses (e.g., corporations, partnerships, and sole proprietorships) but also non-profit organizations such as foundations, associations, and public law entities, as well as foreign businesses operating within the country.
The UID ensures that each entity has a unique identifier for tax and administrative purposes. Even if a business engages in multiple sectors or activities, it will retain a single UID, which is used consistently across all its operations. In the public sector, municipalities and cantons are also assigned their own UIDs, as are the federal government, its departments, and federal offices.
The UID register contains essential information on all companies and legal entities with a UID number in Switzerland. The data includes:
This information is publicly accessible and can be found through the UID register online. The UID ensures transparency and simplifies business administration.
The UID is a nine-digit number formatted as “CHE-123.456.789”. The “CHE” prefix signifies that it is a Swiss identifier, followed by nine digits that are randomly assigned. The number may be written without the hyphen and dots, although it is generally preferred to include them. The UID remains the same for the life of the company and serves as a core identifier for all tax, legal, and administrative purposes.
The Value Added Tax Number (VAT Number) is specifically intended for companies that are subject to value-added tax in Switzerland. It is based on the Company Identification Number (UID) and is used to handle VAT obligations within Switzerland.
The VAT Number is particularly used to facilitate the processing and collection of VAT domestically by uniquely identifying companies registered for VAT. The VAT Number serves the following purposes:
For companies operating in Switzerland, the VAT Number is essential to ensure compliance with national tax laws.
The VAT Number is automatically assigned to companies by the Federal Tax Administration (FTA) as soon as they register for VAT. In Switzerland, companies are generally required to register for VAT if their annual turnover exceeds CHF 100,000.
The Swiss VAT Number is based on the UID and is formatted as follows: CHE-123.456.789 MWST.
In Switzerland, the Value Added Tax Number (VAT Number) is used to identify companies that provide services subject to VAT. This number is based on the Company Identification Number (UID) and is used to manage VAT obligations within Switzerland.
In the European Union, on the other hand, the VAT Identification Number is used to uniquely identify companies for intra-community transactions. However, the designation of this number varies from country to country:
If you, as a Swiss company, wish to conduct business within the EU, you may need to register for VAT in one or more EU countries and apply for a corresponding VAT Identification Number of the respective country. This allows you to comply with EU VAT regulations and entitles you, under certain conditions, to benefit from VAT exemption for intra-community supplies.
Below is a brief overview of the key differences between the three tax identifiers we have examined in Switzerland:
While the TIN is used by individuals, the UID and VAT Number apply to companies, with the VAT Number specifically relating to VAT obligations within Switzerland.
Understanding Switzerland’s tax system can be challenging, especially when dealing with various tax identification numbers. Whether you are an individual looking to understand your tax obligations or a business managing both UID and VAT compliance, Nexova’s team of tax and accounting experts can provide comprehensive guidance. We are here to ensure that your tax affairs are in order and fully compliant with Swiss and international regulations.
Contact us today to learn more about how we can ensure you stay on top of your taxes and maximize your savings!
Answers at a click
AEIO (also abbreviated as AIA) stands for the Automatic Exchange of Information, a system that allows tax authorities from different countries to exchange financial information about taxpayers. Switzerland participates in the AEIO to ensure transparency and prevent tax evasion. The TIN is used to track individuals under the AEIO.
Individuals can find their TIN on official tax documents such as tax returns or correspondence from Swiss tax authorities. It can also be found on their health insurance card, from their full-time employer, or from the compensation office.Businesses can access their UID and VAT ID via registration documents or through the UID register online.
Yes, foreign companies operating in Switzerland receive a UID to comply with Swiss tax regulations. The UID is automatically assigned to them as soon as they register with a competent authority, for example in the commercial register or with the Federal Tax Administration. This is necessary regardless of turnover if they provide certain services or make deliveries.
A Value Added Tax Number (VAT Number) is mandatory for companies with an annual turnover exceeding CHF 100,000 from taxable services in Switzerland. Companies with lower turnover can voluntarily register for VAT. Foreign companies providing services in Switzerland must register under certain conditions, regardless of turnover.
Legal entities, i.e. companies and other legalentities (legal entities), receive a company identification number (UID) in Switzerland. This number serves as the central Swiss tax ID and is issued by the tax administration. By law , the UID is required for all administrative and tax matters. It enables the company to be clearly identified to the authorities and simplifies tax processes. The UID is assigned automatically when a company is founded or registered.
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