MWST, Co-Working and the “Hidden Trap”

1 Nov

BLOG SERIES PART 4

MWST, Co-Working and the “Hidden Trap”: Why Space Owners Are Not Responsible for Member Turnover — And Why Authorities Already Know This**

One of the most confusing areas for independent professionals is VAT (MWST).
Not because the rules are unclear, but because the beauty and hair industry has historically operated in models that look nothing like today’s co-working structures.
And when structures change, misunderstandings often follow.

Here’s the truth:

If a co-working space is structured correctly, the space owner does not collect MWST on the income earned by the independent professionals using the space.
Not now.
Not ever.

Some auditors or inspectors may test this boundary to see whether the business owner will misunderstand the rules.
But the law, the logic and the established practice across Switzerland are very clear.

This article explains exactly why co-working income is NOT subject to MWST by the space owner, how authorities sometimes test the limits, and why dozens of major co-working spaces in Zürich prove this every single day.

The “Dirty Little Trick”: Blurring the Line Between Rental, Subleasing and Co-Working

When a co-working space is audited, the first tactic often used is to look for signs that the space owner is operating:

a joint business,
a revenue-sharing structure,
an employer-like system, or
a sublease (Mietvertrag) instead of a co-working membership.

Because if any of these were true,
then there could be a theoretical argument for MWST aggregation or shared turnover responsibility.

This is the classic “gotcha” move.

But here’s the key:

None of those conditions apply to a true co-working space.

So the entire premise collapses before it begins.

How Authorities Try to Test the Space Owner

In audits, an inspector may ask questions like:

“Do you benefit from the members’ income?”
“Do you control their pricing?”
“Do you provide clients to them?”
“Is there a fixed chair allocated to each stylist?”
“Is the payment to you based on how much they earn?”
“Do you issue receipts for their services?”

These questions are designed to see whether your setup resembles:

a salon-with-subcontractors,
a pseudo-employment structure, or
a revenue-integrated business.

If the owner answers incorrectly — even by accident — it can trigger deeper investigation.

But when the structure is designed properly (as in a true co-working space),
every answer is clean, simple, and fully compliant.

Why MWST Does NOT Apply to Co-Working Space Owners Based on Member Turnover

Because the law is clear:

MWST applies to the entity delivering the service.

In a co-working space:

Members deliver their own services
Members invoice their own clients
Members collect their own revenue
Members reach or do not reach the MWST threshold individually

Meanwhile:

The space owner provides workspace access,
Charges a fixed membership fee,
And pays MWST only on that fee if required.

No joint business.
No shared turnover.
No VAT group.
No aggregation.

If MWST were applied to a co-working space owner based on member income, then:

Impact Hub would owe MWST on the earnings of every freelancer working inside it.
Westhive would owe MWST on every consultant’s revenue.
Citizen Space would owe MWST on every therapist’s session.
Trust Square would owe MWST on every blockchain developer’s invoice.
Therapeutic co-working practices across Zürich would owe MWST on every psychologist, physiotherapist, osteopath or nutritionist working inside the building.

And that would be absurd — because it is not how the law is written, interpreted or applied.

Authorities know this.

Co-working spaces everywhere in Zürich operate under this rule every day.

Why This Also Applies to Hair, Beauty, Tattoo and Wellness Co-Working Spaces

Some industries transitioned into co-working earlier than others, which means the “office-style” model is well understood by authorities.

But the profession doesn’t matter.

The structure does.

A co-working hairdresser, tattooist or beauty practitioner is no different from:

a therapist treating clients at Citizen Space,
a designer earning CHF 20,000 a month at Westhive,
a consultant running international clients out of Impact Hub,
a physiotherapist renting a treatment room in a shared wellness centre.

Not one of these spaces collects MWST based on the income their members earn.
They charge access fees.
Members run independent businesses.
The end.

To suggest otherwise would mean the entire co-working economy is functioning illegally — which, of course, it isn’t.

The Real Question Authorities Ask: Are You Truly a Co-Working Space?

When viewed through VAT and SVA lenses, the question isn’t:

“What industry are you in?”

The real question is:

Does this space operate as a co-working environment, or as a disguised rental or shared salon business?

If the structure is correct:

Members invoice clients under their own business
Members choose prices and services
No turnover is shared
No fixed stations are exclusively allocated
The space charges membership, not rent
There is no commission, no percentage, no revenue-based fee
Payment flows are separate
Branding is separate
Financial visibility is separate

Then there is zero basis for MWST liability on member turnover.

This is exactly why Pod.World — a co-working management app for service-based spaces — was designed from the ground up to maintain these separations flawlessly.

Your structure is not an accident.
It is airtight.

Conclusion: Co-Working Is Legally Solid — and We Are Ahead of the Game

In Switzerland, co-working is not a loophole.
It is a mature, accepted, widespread working model across every industry.

The only time authorities push for MWST or shared turnover is when:

structures look like classic chair rental,
pricing is influenced,
turnover is visible,
payments flow through the wrong account,
or the relationship resembles a mini-salon-with-subcontractors.

A well-designed co-working space avoids every one of these pitfalls.

We know the rules.
We respect the rules.
And we build our systems — including Pod.World — to fit squarely inside them.

In the next article, we’ll look directly at the VAT threshold, how aggregation actually works, and how co-working models stay far away from the risk zones.