Swiss VAT and intermediation in the finance industry: the perpetual controversy

Introduction  

Intermediation is one of the most fact sensitive areas of Swiss VAT for banks, securities firms, asset managers and other financial-service providers. Why is that?  

Depending on what you do, how you do it and with whom, intermediation can be VAT exempt without credit or taxable/VAT exempt with credit.  

The preferred VAT treatment max also depend greatly on where the party concerned sits in the financial transaction. One party may greatly favour one VAT qualification, while another may favour the opposite.  

What is intermediation?  

In the financial services industry, intermediation is the activity of a person acting as an intermediary with the aim of bringing about a contract between two parties in the money and capital markets, without being a party to the contract itself and without having any interest of its own in the content of that contract.  

In practice, this normally involves identifying or approaching a potential counterparty, bringing the parties together, transmitting or discussing transaction terms, or otherwise participating in the process leading to the conclusion of the contract, without becoming party to it.  

Intermediation is exempt from VAT without credit, as the underlying transaction such as the sale of shares, bonds and derivatives is also exempt from VAT without credit.  

By contrast, an activity is considered marketing rather than intermediation if the intermediary activity is not directly linked to a specific commercial transaction or is not connected with transactions that will subsequently be carried out. The activity of simply introducing clients instead constitutes a service in the field of advertising or the provision of information.  

Typically, a pure “tipster” or finder who supplies a name without becoming involved in the concrete process of bringing the parties to an agreement is therefore generally considered to perform marketing activities and not intermediation.  

Marketing services are taxable / VAT exempt with credit (even if commission based or success fee based).  

As taxation is the basic principle under Swiss VAT law, in cases of doubt over the correct classification, the Federal Tax Administration (FTA) is likely to consider the activity taxable or exempt from VAT with credit.  

 Where does the main controversy lie?  

One of the main controversies (knowing that there are others) lies with the concept of “having any interest of its own”. In a nutshell, if you have such interest, it is taxable /VAT exempt with credit.  

Recent decisions by the Swiss Federal Administrative Court provide some guidance on this question:  

• The mere fact of receiving a commission for the intermediation does not generate an “interest of its own” (case A-801/2025).  
• The majority ownership of the entity paying the intermediation fee to its intermediating majority shareholder may generate an interest of its own for said shareholder (case A-7215/2025).  

 Does this settle the matter?  

No, for two reasons. First, the Swiss Supreme Court may render opposite decisions and second, the cases where “having an interest of its own” will be discussed and argued are well beyond these two cases which went to court.  

What should businesses do?  

In practice, the safest approach is a transaction-by-transaction review supported by consistent contracts, invoices and operating evidence.  

One should not forget the widely used Swiss practice of rulings, by which the taxpayer asks, preferably in advance, for the precise position of the FTA in a specific case.  

For complex cases, obtaining such a ruling can provide greater certainty on the appropriate VAT treatment.  

Author: Alexandre Sadik