Swiss Arbitration Quick Tips

Swiss Arbitration Quick Tip #1: VAT on Swiss arbitrators’ fees

Under Swiss law, services provided by arbitrators are exempt from value-added tax (VAT). Article 21(2)(29) of the Swiss Federal VAT Act expressly excludes arbitral services from the scope of VAT. As a result, arbitrators domiciled in Switzerland are not required to determine which portions of their fees may be subject to VAT, unless they have voluntarily opted into VAT taxation pursuant to Article 22 of the Swiss Federal VAT Act. 

This exemption does not extend to the fees of Swiss legal counsel representing parties in arbitration proceedings, as such services do not fall within the notion of “functions of arbitration” (see Swiss Federal Tribunal decision 2C_807/2008 of 19 June 2009). 

The VAT treatment of tribunal secretaries’ fees is more nuanced. In practice, these fees are generally considered to fall outside the “functions of arbitration,” in particular where the secretary’s role amounts to an outsourced and distinct service. 

While Swiss arbitrators benefit from a VAT exemption on their own fees, presiding arbitrators sitting with foreign co-arbitrators or under the auspices of foreign arbitral institutions should remain attentive to VAT issues and carefully assess whether VAT considerations arise when determining costs and their allocation.