VAT in Switzerland: how it works

Value added tax (VAT, German: Mehrwertsteuer) applies to most goods and services supplied in Switzerland and is administered by the Federal Tax Administration (FTA). The current rates — 8.1%, 2.6% and 3.8% — have been in force since 1 January 2024, when the old rates of 7.7%, 2.5% and 3.7% were raised to help finance the state pension scheme. If you are planning a Swiss company formation, VAT is usually the first tax obligation you will deal with, often before the first corporate tax bill arrives.

Who must register for Swiss VAT

The CHF 100,000 threshold refers to worldwide turnover, not Swiss turnover — this is the point most foreign businesses get wrong. A company that generates CHF 2 million in its home market and sells services worth CHF 5,000 into Switzerland is liable for Swiss VAT from the first franc of Swiss supplies, because its global turnover already exceeds the threshold.

The basic rules, as of July 2026:

• Swiss businesses become liable once taxable worldwide turnover reaches CHF 100,000 in a twelve-month period.
• Foreign businesses become liable under the same worldwide test as soon as they make supplies in Switzerland that are not exempt from the obligation (certain services taxed via the reverse charge in the hands of the recipient remain outside the registration duty).
• Non-profit, volunteer-run sports and cultural associations and charitable institutions enjoy a higher threshold of CHF 250,000.
• Mail-order and platform rules: since 2025, digital platforms that facilitate sales of goods are themselves deemed the supplier for VAT purposes, and mail-order sellers shipping low-value goods become liable once such sales reach CHF 100,000 per year.

Registration must be requested within 30 days of the start of tax liability. Voluntary registration below the threshold is possible and often sensible for businesses with significant input tax to reclaim.

Swiss VAT rates in 2026

Switzerland has three VAT rates. Which one applies depends on the type of supply, not on who buys it.

Separate from zero-rated exports, some sectors are exempt without credit: healthcare, education, insurance, most financial services and residential letting. These businesses charge no VAT but also cannot reclaim input tax, which makes voluntary opting-in attractive in some constellations.

VAT registration step by step

The registration process runs through the Federal Tax Administration and is entirely online. In practice it looks like this:

1. Check your liability

   Establish when worldwide turnover crossed CHF 100,000 and whether your Swiss supplies trigger the registration duty. The date matters: liability starts then, not when you get round to registering.

2. Register with the FTA

   File the online registration via the FTA ePortal within 30 days. You will need the company's UID number (issued with the commercial register entry), a description of activities and expected turnover.

3. Appoint a fiscal representative (foreign companies)

   Businesses without a Swiss domicile or permanent establishment must name a representative resident in Switzerland and usually provide security — typically a bank guarantee or cash deposit set by the FTA.

4. Choose your settlement method

   Decide between the effective method and the net tax rate method (see below), and between agreed consideration (invoice date) and received consideration (payment date) as the settlement basis.

5. Invoice correctly and file returns

   From the effective start date, invoices must show your VAT number in the format CHE-123.456.789 MWST and the applicable rate. Returns are filed quarterly, semi-annually or — since 2025 — annually.

The company's entry in the commercial register usually precedes VAT registration; how that entry works is covered in our guide to the Swiss commercial register.

Effective method or net tax rate method

The effective method is the default: you charge VAT on sales, deduct input tax on purchases and file quarterly. The net tax rate method (Saldosteuersatz) replaces input tax accounting with a flat industry rate applied to gross turnover — a consultancy, for example, pays a fixed percentage of revenue and files only twice a year.

When the net tax rate method does not pay off: businesses with large input tax positions — traders with high cost of goods, companies in an investment phase, exporters whose sales are zero-rated — almost always lose money on the flat rate, because they surrender input tax refunds that would exceed the simplification benefit. Once chosen, the method must generally be kept for at least one year, and switching back to the effective method locks you in for three years, so the decision deserves a proper calculation rather than a default choice.

Input tax deduction

Input tax (Vorsteuer) is the VAT your business pays on purchases, and under the effective method it is deducted from the VAT collected on sales in each return. The conditions are practical rather than exotic: the expense must serve the taxable business activity, and you need proper receipts showing the supplier's VAT number and the tax amount or rate. VAT on costs attributable to exempt-without-credit activities or private use cannot be deducted, and mixed-use situations require an apportionment. Clean bookkeeping is the whole game here — many businesses hand the quarterly returns to their fiduciary as part of standard accounting and administration support, which costs less than a single missed input tax position.

Registration duties in context

VAT is only one of the registrations a new Swiss company deals with. Corporate income tax follows automatically from the commercial register entry, social insurance registration follows from hiring, and the interplay between salary, dividends and VAT-relevant management fees deserves planning before the first invoice, not after. An overview of the corporate tax side is available on our Swiss taxes page.

What to do next: if your worldwide turnover is near CHF 100,000 and you supply Swiss customers, check your liability date now — the FTA can assess back years, with interest, when registration happens late. Foreign businesses should line up a fiscal representative before the first Swiss supply rather than after.