All you need to know about Swiss VAT

As of 1st of January, 2024, Swiss VAT rates have raised. Here you can find more information about the changes. However, even with the recent increase in the rates, Switzerland remains to have the lowest VAT rate in Europe.

 1.    VAT Registration

A company needs to register for a Swiss VAT, once the turnover exceeds CHF 100,000. The voluntarily registration also can be done even the business has a lower turnover.

2.   VAT Rates

Switzerland has different VAT rates for various goods and services:

• Standard rate - 8.1%

• Reduced rate - 2.6%

• Special rate for accommodation –3.8%

3.   VAT Invoices

Businesses registered for VAT must issue VAT invoices for their taxable supplies.

Invoices must include specific details such as the VAT identification number, a description of the goods or services, the amount excluding VAT, the VAT rate, and the VAT amount.

4.  VAT Returns

VAT registered companies are required to file VAT returnson quarterly basis. The return should detail the taxable supplies, input VAT (VAT paid on purchases), and the resulting VAT liability or refund.

5.  Import and Export

Imports of goods into Switzerland are generally subject to VAT at the border. Businesses may be able to reclaim this VAT on their VAT return.

Exports of goods to destinations outside Switzerland are typically zero-rated for VAT purposes.

6.  VAT Exemptions

Some goods and services may be exempt from VAT, such as healthcare, education, etc.

7.  VAT declarations for Foreign Businesses

Non-Swiss businesses that incur VAT on expenses in Switzerland, or invoice the clients in Switzerland with Swiss VAT, can register for VAT in Switzerland and may be eligible to reclaim/pay the VAT. Quarterly declarations need to be submitted.

8.  Compliance and Penalties

Non-compliance with Swiss VAT regulations, as well as late submissions will result in penalties, therefore it is crucial for businesses to stay informed and comply with the relevant rules.

In case any assistance is required in terms of VAT registration, completion and submission of the declarations to the tax authorities, please get in touch by mail@ftrust.ch.