Swiss VAT in 2025: rates, declaration and exemptions
Value Added Tax (VAT) is one of the State's main sources of revenue. As a consumption tax, it is borne by the end customer, but it is your company that collects it and remits it to the Confederation.
• In Switzerland, three VAT rates have applied since 2024: 8.1%, 2.6% and 3.8%. Registration is mandatory from CHF 100,000 in annual turnover.
• Two accounting methods: the effective method (quarterly) or the simplified net tax rate method (half-yearly, reserved for SMEs).
• VAT is paid in CHF: if you work in euros, bank conversions cost you more than they appear to.
In practice, VAT is always included in the final price paid by the buyer, and it is this amount that you manage on behalf of the State.
Invoicing this indirect tax in Switzerland raises an essential question: are you applying the correct rate? Or are you following the correct procedures?
With the rate increase that took effect on 1 January 2024 and the introduction of strict rules for e-commerce, a mistake can be costly in terms of compliance and administrative time.
As always, b-sharpe understands the challenges of growing and succeeding on Swiss soil. This ultra-practical guide gives you the keys to mastering your VAT obligations in 2025.
We update all the figures and detail the accounting methods (effective, net tax rate), the exemption thresholds (CHF 100,000 / CHF 250,000) and the specific steps for foreign companies.
Discover everything you need to know to guarantee smooth and optimised VAT management.
What are the applicable VAT rates in Switzerland in 2025?
Basics and applicable rates
To start on solid ground, let’s immediately update a key piece of information: Swiss Value Added Tax (VAT) rates were increased on 1 January 2024 and remain fully applicable in 2025.
If you were used to the old rates (7.7%, 3.7%, 2.5%), it is essential to incorporate these new figures into your invoicing and accounting.
Here are the three rates you need to know for 2025:
Overview of tax rates*
*Source : Taxes and finance section of the official ch.ch website
| VAT rate | Percentage (since 01.01.2024) | Services concerned |
| Standard rate | 8.1% | This is the default rate. It applies to the majority of deliveries of goods and taxable services on Swiss territory. |
| Reduced rate | 2.6% | It mainly concerns basic necessities, such as food (including non-alcoholic beverages), medicines, newspapers, books and menstrual hygiene products (from 01.01.2025). |
| Special rate for accommodation | 3.8% | This rate applies exclusively to accommodation services (overnight stays with or without breakfast) in the hotel and para-hotel sector. |
How do you calculate VAT on your sales and services?
VAT is an indirect tax added to the net price (excluding tax) of your goods or services.
In Switzerland, as in Europe, the approach is the same: you collect VAT on behalf of the Confederation.
Here is the simple formula for determining the amount of VAT to invoice:
Price excluding VAT×Applicable VAT rate=VAT amount
If you want to obtain the total price including all taxes, simply apply the formula:
Price including VAT=Price excluding VAT×(1+VAT rate)
Since 1 January 2018, three main rates have applied in Switzerland:
- The standard VAT rate (7.7%) applies by default to any transaction involving the sale of goods or a service – it is the most common of the three;
- The special VAT rate (3.7%) applies to any accommodation service, such as hotels, where stays include an overnight stay;
- The reduced VAT rate (2.5%) applies in particular to basic necessities such as water, food, health or certain cultural goods (books, newspapers, magazines, etc.).
The details of these rates, still in force in 2021, are available in this PDF document.
💡 Practical tip :
The golden rule is to always apply the correct rate. If you sell several types of goods or services (for example, food at the reduced rate and a consulting service at the standard rate), make sure to properly break down your invoicing for each rate.
This greatly simplifies your subsequent returns to the Federal Tax Administration (FTA).
VAT and e-commerce: what do distance sellers need to know?
The rise of online commerce has required an adaptation of Swiss rules, particularly for mail order sales.
If you are a distance seller, whether Swiss or foreign, these rules concern you directly.
The tipping point is turnover
A company, including an online seller, is automatically liable for VAT in Switzerland if it generates a worldwide turnover of at least 100,000 Swiss francs (CHF) from services not excluded from the scope of the tax (sales in Switzerland and abroad).
As soon as you reach this threshold, you must register in the register of persons liable for VAT.
Foreign distance sellers
For foreign companies delivering goods from abroad to Switzerland, an additional and essential rule applies:
If your annual turnover generated solely by small consignments imported into Switzerland (goods for which the VAT due is less than CHF 5, i.e. a goods value of around CHF 65) exceeds CHF 100,000, you are considered a liable distance seller.
Consequence: Instead of letting the recipient (your customer) pay import VAT, it is you, the distance seller, who must register in the Swiss VAT register and invoice Swiss VAT directly to your customers (at the standard rate of 8.1% or reduced rate of 2.6%) from the very first franc of turnover in Switzerland.
This is a vital step to avoid compliance problems with the FTA and to ensure a smooth customer experience for Swiss buyers, who will not have to deal with unexpected customs fees.
Save on EUR/CHF exchange for your VAT payments
Swiss VAT is always paid in Swiss Francs (CHF).
If a significant part of your income (for an SME or a self-employed cross-border worker) or your company’s cash flow is in Euros (EUR), you must constantly carry out EUR/CHF exchanges to pay your tax obligations.
Each conversion is an opportunity to lose money on the exchange margin applied by your bank.
The smart reflex for your VAT payments
Banks apply a significant margin on the real exchange rate (Forex).
This margin increases the cost of your VAT payment, without you clearly realising it.
An online exchange specialist, such as b-sharpe, offers you a rate much closer to the market and applies a low, transparent commission.
Whether it’s to convert EUR into CHF to pay the FTA, or to convert your CHF into EUR after a VAT refund, the saving made on the exchange rate allows you to preserve your cash flow.
In short, don’t let hidden exchange fees add to the burden of your VAT obligations.
Compare your bank’s rate with the market rate before carrying out the conversion needed to pay your next tax bill.
How do you declare and pay VAT in Switzerland?
Once your company is liable for VAT, you enter the practical phase: regular declaration and payment of the tax.
Switzerland offers different accounting methods, adapted to the size and profile of the company.
Declaration for Swiss companies
Every company liable for VAT must submit a periodic return to the Federal Tax Administration (FTA).
Your unique identifier: the VAT number (UID)
To declare and pay VAT, you must have your VAT number.
Since 1 January 2014, it is the Business Identification Number (UID), mandatorily followed by the addition “VAT” (example: CHE-123.456.789 VAT), which serves as the tax identifier (Source: ch.ch/En).
This number must appear on all your invoices.
Accounting methods: choose the option suited to your cash flow
There are two main methods for regular VAT accounting:
- The agreed consideration method (effective accounting method):
- This is the most common method.
- VAT is due on the basis of invoices issued (receivables), even if payment from the customer has not yet been received.
- It is generally quarterly (but can be monthly on request).
- The received consideration method (based on receipts):
- The FTA must grant authorisation for this method.
- VAT is due on the basis of receipts actually collected (actual payments).
- It is often recommended for very small businesses or those that do not keep complete debtor-creditor accounting.
The simplified method: net tax rate (NTR)
To ease the administrative burden on small and medium-sized Swiss businesses, the FTA offers a highly appreciated simplified method:
- Criteria: To benefit from it, your turnover must not exceed CHF 5.02 million and your tax liability must be at most CHF 108,000 per year (2024 figures).
- How it works: Instead of determining input tax for each transaction, you apply a flat rate (the NTR) specific to your business sector to your total turnover (including VAT).
- The advantage? Returns are only made twice a year (instead of four times), which greatly simplifies accounting.
VAT for foreign companies operating in Switzerland
A company with its head office abroad, but which carries out an activity on Swiss territory, is subject to the same rules of liability as Swiss companies, provided it reaches the determining turnover threshold of CHF 100,000 per year.
The obligation to appoint a tax representative
Foreign companies must mandatorily appoint a tax representative domiciled in Switzerland with the FTA.
This person or entity will be the official point of contact for all VAT matters.
Special case: the permanent establishment
If the foreign company has a permanent establishment in Switzerland (a branch, for example), this establishment is considered an autonomous tax subject.
The liability rules are then identical to those of a standard Swiss company.
If the company has several permanent establishments in Switzerland, they are treated as a single taxable entity.
Who collects VAT? The role of the FTA and customs
VAT collected in Switzerland goes entirely to the Confederation.
It is collected by two main bodies depending on the type of transaction:
- The Federal Tax Administration (FTA)
The FTA is the central body for domestic VAT (domestic trade: deliveries of goods and services provided in Switzerland).
It is to the FTA that you send your periodic returns and payments.
- The Federal Office for Customs and Border Security (FOCBS) (formerly the Federal Customs Administration – FCA)
The FOCBS handles import VAT on goods.
Any goods imported from abroad into Switzerland are subject to VAT (in addition to any customs duties), and it is the FOCBS that collects it at entry into customs territory.
Optimise your VAT cash flow
If you are a foreign company or a self-employed cross-border worker invoicing in EUR, the obligation to pay your VAT in CHF can generate significant exchange fees with every return.
As a EUR/CHF exchange specialist, we remind you that using a transparent online exchange service for your conversions allows you to avoid the opaque margins applied by traditional banks.
Optimising your exchange rate is a direct lever for reducing the real cost of your tax obligations in Switzerland.
In which cases can you be exempted from or deregistered for VAT?
Even though VAT applies by default to any commercial or professional activity in Switzerland, there are specific situations where you are not obliged to be liable, as well as procedures for exiting the VAT scheme (deregistration).
Exempt businesses and associations (turnover threshold)
In practice, the main way to be released from liability is not to reach the turnover thresholds set by law.
The golden rule (CHF 100,000)
Any Swiss or foreign company is released from liability if its annual turnover from taxable services, carried out in Switzerland and abroad, is less than CHF 100 000 (pursuant to Art. 21, para. 2, VAT Act).
Key point: This release concerns worldwide turnover from liable services.
Exceptions for certain entities (CHF 250,000)
A higher threshold applies to two types of organisation:
- Non-profit sports and cultural associations run on a voluntary basis.
- Charitable institutions.
For these organisations, the threshold for release from liability is set at CHF 250,000 turnover per year (Source : legal text Art. 10, para. 2, let. c, VAT Act).
💡 Good to know: voluntary liability
Even if you are below the thresholds, you can choose to voluntarily register for VAT.
This step is worthwhile if:
• You are in the start-up phase and have significant input tax deductions to claim (large initial investments, for example a research start-up).
• You carry out the majority of your services abroad or act as a subcontractor for other liable Swiss companies, as the input tax deduction can be a competitive advantage.
Corporate purpose (services excluded from the scope of the tax)
Regardless of your turnover, certain services are excluded from the scope of the tax.
This means that revenue generated by these activities does not need to be taken into account when calculating the liability threshold and does not trigger a VAT obligation.
Among the common excluded services are notably:
- Services in the healthcare field (medical treatment).
- Training and education services.
- Certain transactions in the money and capital markets (such as loan interest).
- The transfer and rental of buildings (under certain conditions, unless the option for taxation is chosen).
Services provided by charitable institutions and certain non-profit services in the fields of culture and sport.
⚠️ Warning : A company may have an exempt main activity (e.g. training), but also carry out a small taxable activity (e.g. selling books).
Only the turnover from the taxable activity counts towards the CHF 100,000 threshold.
Other grounds for deregistration and exemption
Deregistration (exiting the register of liable persons) is not automatic.
It must be requested from the Federal Tax Administration (FTA) in the following cases:
1. Fall in turnover
If you were liable but your determining turnover no longer reaches the threshold of CHF 100,000 (or CHF 250,000) and it is likely that it will not be reached the following year, you are released from liability.
Procedure: You must request your deregistration from the FTA at the earliest for the end of the tax period in which the threshold ceased to be reached.
The request is deemed to be on time if it is sent to the FTA within 60 days of the end of the tax period (Source: estv.admin.ch).
2. Permanent cessation of activity
Liability ends automatically in cases of cessation of business activity, such as:
- Pure and simple cessation of activity (retirement, returning to employed work).
- Liquidation of a business estate (at the close of the procedure).
Procedure: In these cases, you must request deregistration in writing from the FTA within 30 days of ceasing activity (Art. 66, para. 2, VAT Act).
3. Cessation of activity for a foreign company
For companies with their head office abroad, liability ends at the end of the calendar year in which they provided their last service on Swiss territory.
The deregistration request must be made to the FTA within 30 days.
💡 Good to know :
Before requesting your deregistration, remember that once no longer liable for VAT, you lose the right to input tax deduction.
For companies with a lot of expenses (and therefore a lot of input tax to recover), remaining voluntarily liable can be more financially advantageous than being released.
Always weigh the savings from the deduction against the administrative burden of the return.
Frequently asked questions about VAT in Switzerland
The general liability threshold is CHF 100,000 in worldwide annual turnover (from services not excluded from the scope of the tax).
Practical exceptions:
– This threshold rises to CHF 250,000 for non-profit sports/cultural associations and charitable institutions.
– If you are below these thresholds, you are released from mandatory liability, but you can choose to opt in voluntarily.
Your choice depends on the complexity of your activity and your turnover:
– Effective method (the most precise): For all liable companies, especially those with highly variable input tax amounts. You recover the exact amount of input tax paid on your purchases and expenses.
– NTR method (Net Tax Rate, the simplest): For SMEs (turnover CHF 5.02 million AND tax liability CHF 108,000). You apply a flat rate for your sector to your total turnover (including VAT). This replaces the detailed calculation of input tax. Less administrative work.*
Our advice: Eligible SMEs often choose the NTR for the administrative time savings.
However, if you have a lot of expenses (and therefore a lot of input tax to recover), the effective method can be more financially advantageous.
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