VAT in Switzerland

Many businesses see Switzerland as one of the main gateways into the European marketplaces. The landlocked country is centrally located and is an ideal jumping off point into France, Italy, Germany and Austria.

Switzerland is not a member of the European Union (EU) and draws up its own tax rules and laws. Therefore, Switzerland does not follow the VAT directives or guidance issued by the European Union, including the setting of VAT rates.

While not a member, Switzerland does hold a number of treaties with the EU, which means businesses can operate within the country in a similar manner as they do with the EU.

Switzerland is also not a member of the European single market economy and uses its own currency, the Swiss Franc (CHF). In Switzerland VAT works in a very similar way to the rest of Europe and is locally known as: Mehrwertsteuer, or MWST.

VAT registration in Switzerland

Foreign businesses may trade in Switzerland without establishing a local presence, which is known as non-resident VAT trading. There is a VAT regstration threshold of CHF 100,000, or CHF 150,000 for not for profit, charitable, sporting or cultural organisations. This is based on your business' global turnover, not just within Swiss territories.

If your turnover is under this threshold, you will not need to register for VAT. Once your business crosses this threshold, you must register for VAT with the Federal Tax Administration within 30 days of crossing the threshold. Non-resident businesses will also need to appoint a fiscal representative when registering for VAT.

There are strict rules on the situations where VAT registration is permitted. Common scenarios that require Swiss VAT registration include:

• Importing goods into Switzerland;
• Organising live events, conferences, etc. in Switzerland;
• Holding goods in a warehouse in Switzerland as stock for resale;
• Buying goods within Switzerland that are subsequently re-sold in-country;
• Self-supply of goods.

Swiss VAT compliance

There are detailed rules controlling the recording and processing of xx transactions for VAT purposes. This includes guidelines on:

• Swiss invoice requirements;
• When to issue a Swiss tax invoice;
• Foreign currency reporting;
• Credit notes and corrections;
• Correcting entries from prior returns;
• Which accounting records must be maintained and held for up-to ten years.

Swiss VAT rates