Who must register
Registration becomes mandatory once turnover from taxable supplies reaches CHF 100,000 a year. Below that, you can register voluntarily, for instance to recover the VAT paid on large investments.
Since 1 January 2024 the rates are 8.1% for the standard rate, 2.6% for the reduced rate (food, books, medicines) and 3.8% for the special rate on accommodation.
The effective method
You charge VAT to your customers, deduct the VAT you paid to your suppliers (input tax) and pay over the difference. This is the default method.
- Returns are filed quarterly.
- Input tax is deducted to the franc: this pays off when you invest heavily or your purchases are large.
- Every document has to be recorded and backed up with a receipt. That means more bookkeeping work.
The net tax rate method
You apply a flat rate to your turnover including VAT. The rate depends on your line of business and is set by the FTA. It already allows for an average amount of input tax, so you no longer deduct anything.
- It is open to businesses whose annual turnover does not exceed CHF 5,024,000 and whose tax due, calculated at that rate, does not exceed CHF 108,000.
- Returns are filed every six months.
- Bookkeeping is much lighter: input tax no longer needs to be tracked.
- It becomes a poor deal when you make large investments, since the input tax you actually paid is not recovered.
Annual returns, possible since 2025
Since 1 January 2025, some small businesses using the effective method can apply to file only once a year. They pay instalments during the year instead. The FTA sets out the conditions on its website.
How to choose
Run the numbers on a real year. Apply your net tax rate to your turnover, then compare the result with the VAT you actually owe based on your purchase invoices. If the gap is small, the simplicity of the net tax rate method often wins. If you are planning large investments, the effective method is usually the better option.
You cannot switch methods whenever you like: the law sets minimum periods. Talk to your fiduciary before you decide.
Filling in the form
The FTA’s VAT return form numbers every amount, from box 200 for total turnover up to box 910. Qompta prepares these figures from your invoices, with the effective method as well as with the net tax rate: all that is left is to check them and enter them on the FTA portal.