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Practical Guidance for Arbitrators and Counsels on Value Added Tax in Arbitration Proceedings

April 2010 - Tax & Private Client. Legal Developments by Walder Wyss Ltd.

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In a gem of a judicial comment on the alleged simplicity of the modern VAT system, Lord Justice Sedley sardonically remarked: “Beyond the everyday world … lies the world of VAT, a kind of fiscal theme park in which factual and legal realities are suspended or inverted. In this complex parallel universe …relatively uncomplicated solutions are a snare and a delusion”1.

Given the inherent complexity of tax law, and given the involvement in arbitration of multiple parties, including arbitrators, which may be established in different countries, whilst the place of arbitration may be in another country, it is not surprising that occasionally arbitrators are at loss when trying to determine the correct VAT treatment of their fees.

The good news is that, with proper guidance, answering the practical question “Should I be charging VAT?” is easier and simpler than it might seem – at least for arbitrators and counsel domiciled in Switzerland.

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