Procedures and requirements: understanding Swiss invoicing in 2022

Depending on the goods and services sold, the transaction cost, the type of recipient or the size of your business, the procedures and requirements for issuing an invoice will vary. Want to know everything there is to know about the finer points of this accounting document? Follow our guide!

When should you issue an invoice?

Definition of an invoice

An invoice is an accounting document used to record a purchase or sale, providing all the necessary information about a transaction. 

The validity of this registration necessarily requires the mutual consent of the signatories, whether express or implied. However, agreement on the essential terms of the contract is sufficient.

Good to know: Any dispute over minor details on the invoice must be settled by a judge.

Requested by the recipient and issued by the service provider, the invoice offers three key guarantees relating to:

• the origin of the transaction;
• the integrity of the transaction;
• the authenticity of the transaction.

For goods and services costing less than CHF 400, an invoice is not required: a receipt issued without the recipient’s first and last name is sufficient.

Above this amount, the accounting document is legally valid in various forms, such as:

• the contract;
• the receipt;
• the credit note;
• the receipt, voucher or sales slip (from a cash register or electronic system).

Please note that some documents, on the other hand, do not constitute an invoice; this applies in particular to:

• faxes;
• purchase orders;
• delivery notes;
• invoicing records;
• emails;
• invoices sent electronically.

Furthermore, photocopies and duplicates are subject to limited rights.

Nevertheless, the principle of freedom of choice of evidence set out in Article 958F of “Book Five: Rights and Obligations” accords the same probative value to invoices regardless of whether they are issued in paper, electronic or digitised form (pursuant to a decision by the Federal Council).

The Federal Act supplementing the Swiss Civil Code specifies that what matters is that the accounting records establish a link to the transaction in question and remain available at all times for a minimum period of 10 years from the end of the financial year. 

Role in accounting

The invoicing process is central to a company’s accounting. For this reason, and in addition to the principle of freedom of evidence, there is the principle of regularity of accounting (set out in section 957). 

The latter stipulates that every billable transaction must:

• be recorded in full;
• be systematically recorded;
• be recorded in a traceable manner;
• be presented in a clear and legible manner;
• be supported by an accounting document;
• be appropriate to the nature and size of the service provider.

Thus, an invoice is a document that not only enables the company to track all the transactions it has carried out, but also (when combined with other accounting records) helps to provide an accurate picture of the company’s assets, financial position and results.

Target audience

Although a request for an invoice from the recipient may be addressed to a service provider, a supplier or a creditor, not all Swiss companies are required to keep the same accounts.

Companies with a turnover of less than CHF 500,000 in the last financial year are subject to simplified accounting rules. Under these rules, only their income and expenditure, as well as their assets, will be taken into account.

The same arrangements apply to:

• associations and foundations that are exempt from registration in the Commercial Register;
• foundations that are exempt from appointing an auditor.

Conversely, companies whose turnover exceeded the threshold of 500,000 Swiss francs during the last financial year are required to keep full accounts. 

Please note: This measure applies in particular to sole traders, partnerships and legal entities.

How do I edit an invoice?

Requirements for an invoice

Of the elements required on an invoice, three are subject to specific regulations.

The signature

The Swiss courts take technological advances into account and, as a result, permit the use of an electronic signature to validate accounting documents.

Although optional, this can facilitate the authentication and verification of the integrity of the data transmitted. The principle of freedom of choice of evidence makes it a practical alternative to a paper-based signature.

An essential element for society, the primary purpose of a signature (whether electronic or not) is to provide greater protection against the subsequent alteration of certain terms of a contract, which might otherwise go undetected.

It is included in the relevant documents:

• for tax deduction;
• the collection of tax;
• the collection of tax.

The price

The amount of the consideration (delivery of goods or services) is, of course, stated on the invoice. 

As invoicing may relate to an international transaction, it is important to know in which currency or currencies the price should be stated:

• Domestic consideration. Where the transaction takes place exclusively within Switzerland, prices may be quoted solely in Swiss francs.
• International payment. If the recipient of the goods or services is based abroad, the total amount is stated in CHF but must also be converted into the customer’s local currency.
• International business partner. Conversely, if your company is acting as the recipient in a B2B transaction, the amounts are stated in the service provider’s currency and the total price must be converted into Swiss francs.

Good to know: Currency conversion can be carried out using, for example, the official exchange rate published by the Federal Customs Administration.

In addition to bilateral transactions, a company’s general ledger is traditionally kept in the national currency, or in the currency most commonly used in its operations.

The default language for an invoice is one of the national languages (French, Italian, German) or, if more convenient, English.

Value Added Tax (VAT)

As a reminder, the VAT applicable to your pricing depends on your business activities; there are three types:

• The standard rate: 7.7%. It applies to the majority of sales, such as vehicles, jewellery, clothing and alcohol, as well as to services provided.
• The special rate: 3.7%. It applies mainly to the accommodation and hospitality sectors.
• The reduced rate: 2.5%. It applies in particular to everyday consumer goods (food), healthcare products (medicines) and cultural goods (books and newspapers).

To gain a better understanding of VAT, we invite you to familiarise yourself with its basic principles, rates and exemptions. As every case is unique, you may also wish to seek advice from a licensed exporter or the Federal Tax Administration (FTA).

Request for an invoice

In addition to the requirement for businesses to keep complete and accurate accounts, an invoice is a document that any recipient of a service worth more than CHF 400 is entitled to request.

The invoicing process may be handled either by the service provider or by a subcontractor (this is referred to as outsourcing). In any case, it is the service provider who remains responsible for the authenticity of the accounting document.

Please note: An invoice is an accounting document required to claim input tax deduction and may be issued to either a natural person or a legal entity.

In this context, the minimum requirement is to identify the supplier (service provider), the customer (recipient) and the service provided. Other details may be made mandatory in accordance with Article 26 of the Federal Act on Value Added Tax.

Payment of an invoice

Whilst it is possible to include a payment deadline on the invoice, the absence of a deadline means that payment may be requested immediately. 

In the event of late payment, section 104 of the Federal Act supplementing the Civil Code states that:

• The debtor who has been served with a formal notice of default shall be liable for annual default interest at a rate of 5%. If a lower rate had previously been stipulated in the contract, the 5% rate shall replace it.
• If the rate specified on the invoice (for example, the B2B discount rate) is higher than the 5% moratorium rate, the latter shall apply.

Good to know: In Switzerland, invoices are paid within 10 to 30 days on average, and more than two-thirds are settled within a month.

As each case is unique, the Federal Tax Administration (FTA) is able to provide any further information to assist you with your invoicing procedures.

His contact details:

Federal Tax Administration

65 Eigerstrasse

3003 Bern

Telephone: +41 58 46 271 06

To sum up:

• the invoice serves to verify the authenticity of the consideration;
• the invoice is only legally valid with the agreement of both parties (the supplier and the recipient);
• an invoice is required for transactions exceeding the threshold of CHF 400;
• the invoice has the same evidential value whether it is issued in paper or electronic form (in accordance with the principle of freedom of evidence);
• the invoice is issued in both the currencies most commonly used by the service provider and the recipient;
• the invoice shows a VAT rate that varies depending on the service in question;
• The invoice must be provided upon request by the recipient;
• Late payment of the invoice will result in an annual interest charge of at least 5%.