Interpretation of the Concept of Brokerage in Value Added Tax Law

Facts

The dispute revolves around the question of how the term "brokerage" pursuant to Art. 21 para. 2 no. 19 lit. a-e of the Value Added Tax Act (VATA) should be interpreted. The lower court held the view that brokerage within the meaning of this provision only exists if the broker acts as a direct representative of the service provider. The Federal Tax Administration (FTA), on the other hand, takes the position that the concept of brokerage should be interpreted more broadly and does not depend on the existence of a direct value added tax representation. The analysis of the systematic and historical interpretation elements shows that the concept of brokerage in Art. 21 para. 2 no. 19 lit. a-e VATA does not have to be linked to the rules on the attribution of services in Art. 20 VATA. Rather, the concept of brokerage must be interpreted independently of whether the broker acts in direct representation or not. The decisive factor is whether a person causally contributes to the conclusion of a contract in the area of monetary and capital transactions between two parties, without being a party to the brokered contract itself and without having a proprietary interest in the content of the contract.

Considerations

The Federal Supreme Court concludes that the change in practice…