Margin Taxation
Margin taxation ensures that VAT is not calculated on the entire selling price, but only on your actual profit margin.
Margin taxation ensures that VAT is not calculated on the entire selling price, but only on your actual profit margin (the margin).
This regulation applies when you purchase certain items from private individuals or other sellers who do not pay VAT and therefore could not claim input tax.
Who does this regulation apply to?
Margin taxation in Switzerland primarily applies to trading in collectibles.
This typically applies to:
- Art objects (e.g., paintings, sculptures).
- Antiques (movable objects).
- Other collectibles (e.g., coins, stamps, jewelry).
- Vintage cars (motor vehicles older than 30 years).
Important: You may only apply margin taxation if you purchased the item without input tax deduction (e.g., from a private individual).
Frequently Asked Questions
3 answers about this topic
That is the crucial question! With the fictitious input tax deduction, you get the tax back on purchase, but must tax the entire proceeds at 8.1% on sale. With margin taxation, on the other hand, you only pay tax on your profit. This is often much cheaper, especially for valuable collectibles or vintage cars with high margins. We calculate both variants for you so you can maximize the cash advantage for your portfolio.
The tax office is strict here: In Switzerland, a vehicle only qualifies as a vintage car for margin taxation purposes from an age of 30 years (and when the original condition is maintained). For "youngtimers" under 30 years old, margin taxation is not an option – instead, we use the fictitious input tax deduction to reduce your tax burden on purchase.
Unfortunately no. The margin is calculated purely from the difference between the purchase price and the selling price. Third-party costs for restoration or transport can be booked as normal business expenses (and you can deduct input tax there), but they do not reduce the taxable margin of the item itself.
Author
Nikola Mirkovic
Head of Fiduciary & Accounting
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