Finances · VAT
From a hundred thousand,
it becomes mandatory.
VAT is not a tax on the company – it's one you collect on behalf of the Confederation. Understand that, and you've understood VAT.
8.1%
Standard rate
The vast majority of all sales.
3.8%
Accommodation
Overnight stays including breakfast in hotels.
2.6%
Reduced
Food, books, medicines.
Reporting methods
Effective or net tax rate?
For small turnovers, the FTA offers two simplified procedures. Choose deliberately – a switch is only possible again after 1–3 years.
Effective method
You charge every sale at the correct rate and deduct the input tax paid on incoming invoices. Precise, but administratively demanding.
Net tax rate method
Possible up to CHF 5.024 million turnover and CHF 108,000 tax. You invoice at the regular rates but remit industry-specific flat rates to the FTA (e.g. 6.2% for consulting). No input tax deduction.
Frequently asked questions
VAT FAQ
The questions founders and SMEs ask us most often about VAT.
From when am I liable for VAT?
From CHF 100,000 worldwide turnover from taxable supplies. Note: foreign sales also count towards the threshold, even if they are exempt from VAT in Switzerland. For associations and non-profit organisations the threshold is CHF 250,000.
Is voluntary registration worthwhile?
Below the threshold you can register voluntarily – sensible if you have many B2B customers (who reclaim VAT as input tax) and you yourself incur high input tax on investments. For purely B2C offerings, voluntary registration typically makes you 8.1% more expensive.
What must every invoice contain?
The following details are mandatory:
- Name and address of the supplier
- VAT number (CHE-…MWST)
- Name and address of the recipient
- Date and type of supply
- Consideration (net) and applicable tax rate
- Amount of VAT owed
How often do I need to file?
Standard: quarterly (effective method) or half-yearly (net tax rate). Filing and payment deadline: 60 days after the end of the reporting period. Late filing incurs default interest (currently 4.75%).
Effective or net tax rate – which is better?
The net tax rate is administratively much leaner and usually cheaper if you have few input tax receipts (typical: consulting, services). The effective method pays off once you have high investments or goods purchases. Switching: after 1 year (net → effective) or 3 years (effective → net).
What happens if I exceed the threshold and don't register?
The FTA registers you retroactively – from the point the threshold was exceeded. You must remit VAT for all invoices already issued (even if you haven't collected payment) plus default interest. Register within 30 days of reaching the threshold.
Which supplies are exempt from VAT?
Education, healthcare, social services, residential rental, financial and insurance services. These sales do not count towards the CHF 100,000 threshold and do not entitle you to an input tax deduction.
Can I deduct VAT on my car, phone and home office?
Only the business-use share. For mixed use: document a comprehensible allocation key (e.g. logbook, m² share). Purely private expenses (food, hobbies) are not deductible.
Don't forget about VAT
Sources & further reading