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Swiss VAT: the basics for businesses
Swiss VAT: what every SME needs to know
VAT worries many entrepreneurs, even though the basic rules are fairly simple. The real risk is not complexity, but overlooking something: late registration or a poorly chosen method can cost several thousand francs.
This guide is for self-employed professionals and SMEs in Geneva wondering whether they need to register for VAT, how it works and which reporting method to choose.
When do you need to register for VAT?
You must register as soon as your annual turnover from taxable supplies reaches CHF 100'000. Worldwide turnover counts, not just turnover generated in Switzerland.
- At startup: if you expect to exceed CHF 100'000 in the first 12 months, you are liable for VAT from the start of your activity.
- Along the way: if you exceed the threshold during the year without having expected to, VAT liability begins at the end of the financial year in which the threshold was reached.
- The deadline: registration with the Federal Tax Administration (FTA) is completed online, within 30 days of the start of VAT liability.
Voluntary registration, below CHF 100'000, can be worthwhile if you make large initial investments or if most of your clients are VAT-registered businesses. You can then recover the VAT paid on your purchases, without disadvantaging your clients, who can recover it too.
Be careful: late registration does not erase anything. The FTA claims VAT for the entire period concerned, with interest, even if you never charged it to your clients.
VAT rates in 2026
| Rate | What it applies to |
|---|---|
| 8.1% (standard rate) | Most goods and services: services, equipment, vehicles, on-site dining |
| 2.6% (reduced rate) | Food, non-alcoholic beverages, books, newspapers, medicines |
| 3.8% (special rate) | Accommodation: overnight stay with breakfast |
Some activities are exempt from VAT: medical care, education, insurance, banking transactions or residential rentals, for example. You do not charge VAT on these supplies, but you cannot recover VAT on related purchases either.
What could change: a popular vote will be held on 29 November 2026 on a VAT increase to fund the 13th AHV/AVS pension. If approved, the standard rate would rise to 8.5% and the accommodation rate to 4%, from 2028 at the earliest. The reduced rate would remain at 2.6%.
Effective method or net tax rate method (NTR)?
This is the most important choice once you have registered, and it mainly depends on the amount of your purchases and investments.
| Effective method | Net tax rate method (NTR) | |
|---|---|---|
| Principle | VAT charged to clients minus VAT paid on your purchases (input tax) | A fixed rate specific to your sector, applied to your turnover including VAT |
| Input tax | Recovered on each purchase | No recovery: it is already included in the rate |
| Returns | Generally quarterly | Generally half-yearly |
| Administrative work | More extensive: every purchase invoice counts | Lighter |
| Conditions | None | Taxable turnover up to CHF 5.024 million including VAT and VAT due up to CHF 108'000 per year |
| Best for | Businesses with many purchases or investments, or exporters | Service providers and small businesses with few purchases |
Switching methods is possible, but it is regulated and requires adjustments, especially for investments. Do the calculations with your fiduciary before choosing.
Returns, deadlines and payment
- The deadline: the return must be filed and VAT paid within 60 days of the end of the period. For the January-to-March quarter, this means the end of May.
- Online: returns are submitted through the FTA portal.
- Late filing: the FTA sends a reminder, then may estimate the amount due itself. Late-payment interest is added if payment is delayed.
- The annual return: since 2025, businesses whose turnover does not exceed CHF 5.005 million including VAT can request to submit just one return per year, with advance payments during the year. Returns for the last three tax periods must have been filed and paid on time.
Invoices, common mistakes and audits
A compliant invoice is the basis for everything: without it, your client cannot recover VAT. It must show your name, address and VAT number (CHE-xxx.xxx.xxx MWST/TVA), the client's name and address, the date, a description of the supply, the amount, the VAT rate and the VAT amount.
The mistakes we encounter most often:
- Forgetting acquisition tax (reverse charge). Services purchased from a foreign supplier that does not charge Swiss VAT (software, online advertising, consulting) are subject to Swiss VAT, which the buyer must declare themselves. A registered business declares them from the first franc: under the effective method, it recovers the same amount as input tax, but under the net tax rate method (NTR), it is a cost. An unregistered business must notify the FTA once such purchases reach CHF 10'000 per calendar year, and then pays 8.1% without recovering anything. Example: CHF 12'000 of Google or Meta advertising invoiced from Ireland represents around CHF 970 in VAT to pay.
- Forgetting the private-use portion of a vehicle or purchases used privately.
- Applying the wrong rate, for example to takeaway sales or mixed supplies.
- Recovering VAT without a compliant invoice, or on non-business expenses.
- Not monitoring the CHF 100'000 threshold, especially in the first years of activity.
The FTA can audit the last five years. Keep all supporting documents for 10 years, and documents relating to real estate for 20 years.
Frequently asked questions
Do I need to charge VAT to a foreign client? For most services supplied to a business established abroad, no: VAT is due in the client's country. For exported goods, the supply is exempt if you have proof of export. Each case should be checked.
Can I deregister if my turnover falls? Yes, if your taxable turnover falls below CHF 100'000 on a lasting basis. Be careful: deregistration may require repayment of part of the VAT recovered on your investments.
Is VAT an expense for my business? Normally not: you collect it on behalf of the Confederation. It becomes a cost if you forget to charge it, apply the wrong rate or lose the right to recover input tax.
Need help with VAT?
RM Solutions handles VAT registration, the choice of method, quarterly, half-yearly or annual returns, and supports you during FTA audits. We welcome you in French, English, Spanish, Italian and Portuguese.