Switzerland's Value Added Tax (VAT) system is built on precision. For 2025, it features clearly defined rates, mandatory electronic filing, and new platform taxation rules that shift the compliance burden to marketplaces. Whether you are an international business expanding into the Swiss market, a freelancer, or a tourist, understanding these mechanics is essential to avoid penalties from the Federal Tax Administration. ## VAT rates in Switzerland in 2025 As of January 2025, Switzerland maintains a three-tier structure. The **standard rate is 8.1%**, covering most goods and services. A **reduced rate of 2.6%** applies to essential items like food and medicine. The **special rate of 3.8%** is exclusively for the accommodation sector. Understanding these Swiss VAT rates is the first step in compliance.

Standard Rate

8.1%

Covers most goods and services like retail, consulting, digital services, and restaurant meals.

Reduced Rate

2.6%

Applies to essential items such as food, water, medicines, books, and newspapers.

Special Rate

3.8%

Exclusively for the accommodation sector, including hotel stays with breakfast.

Current VAT rates in Switzerland for 2025

### History of VAT rate changes The standard rate increased from 7.7% to 8.1% on January 1, 2024, primarily to secure financing for the AHV/AVS pension system. This rate remains stable for 2025, with no further increases currently announced.

Standard VAT Rate Evolution

The rate increased on Jan 1, 2024, to secure pension financing.

7.7%

2018–2023

8.1%

2024–2025

Standard VAT rate changes in Switzerland 2010–2025

{{cta:cta-1}} ## What is VAT in Switzerland? VAT (Value Added Tax), known locally as MWST, TVA, or IVA, is a federal consumption tax levied at each stage of the supply chain. While businesses collect the tax, the burden falls on the end consumer. It operates on a credit-invoice system: you charge VAT on sales and deduct the VAT paid on business purchases. In essence, it is a sales tax in Switzerland designed to be neutral for registered enterprises. ## VAT registration in Switzerland: threshold and process Registration is mandatory once a specific turnover threshold is reached. However, the calculation method often traps foreign entities. The process involves submitting documentation to the FTA and, for non-residents, appointing a representative to secure a Swiss VAT number. ### Who must register? Turnover threshold You must register if your **worldwide** annual turnover from taxable supplies exceeds **CHF 100,000**. A common error is looking only at Swiss revenue. If you generate CHF 1 million globally but only CHF 5,000 in Switzerland, you are still liable for Switzerland VAT registration. Non-commercial organizations face a higher threshold of CHF 150,000. ### Step-by-step registration process 1. **Preparation:** Gather articles of association and proof of global turnover. 2. **Application:** Submit the form via the FTA ePortal (eTax.swiss.ch). 3. **Representation:** Foreign companies must appoint a Swiss-domiciled fiscal representative. 4. **Issuance:** Upon approval, you receive a UID number (e.g., CHE-123.456.789 MWST). ### Voluntary registration and its advantages Companies below the CHF 100,000 threshold can register voluntarily. This is often strategic. If you have significant business expenses in Switzerland, registration allows you to reclaim the input tax, effectively lowering your operational costs. ### Fiscal representation for foreign companies Foreign entities without a Swiss domicile cannot deal with the FTA directly. You must appoint a fiscal representative—a local person or entity—to handle correspondence and compliance. They do not pay your taxes, but they ensure your filings are correct. "The most frequent error I observe is treating the CHF 100,000 threshold as a Swiss-only calculation. The law requires worldwide turnover assessment. Ignoring this creates retroactive liability," notes Markus Pritzker. [Official FTA Registration Portal](https://www.estv.admin.ch/estv/en/home/value-added-tax/registration-and-deregistration-vat/register-for-vat.html). ## How to claim a VAT refund in Switzerland Switzerland allows both tourists and foreign businesses to reclaim VAT, though the mechanisms differ significantly. Whether it is tax-free shopping or corporate reciprocity, strict deadlines apply. ### VAT refund for tourists (tax-free shopping) Tourists residing outside Switzerland can claim a refund if the purchase exceeds **CHF 300** per receipt. The goods must leave the country within 30 days. The process is threefold: get a tax-free form in the store, have it stamped by Swiss Customs upon exit, and collect the funds from an operator like Global Blue.

Tourist VAT Refund: 3 Key Steps

Purchase & Form

Spend over CHF 300 per receipt and request the tax-free form in the store.

Customs Stamp

Before leaving Switzerland, get your form stamped by a Swiss customs officer.

Collect Refund

Present the stamped form at a refund operator's desk (e.g., Global Blue) to get your money.

### VAT refund for foreign companies (non-residents) Foreign businesses that are not VAT-registered in Switzerland can request a refund of VAT paid on local expenses (e.g., trade fairs, hotels). This requires a reciprocal agreement with your home country. Applications must be filed by June 30 of the following year via a fiscal representative. Find the [official refund forms here](https://www.estv.admin.ch/estv/en/home/value-added-tax/accounting-vat/vat-forms.html). {{cta:cta-1}} ## VAT compliance requirements Once registered, strict adherence to Swiss VAT rules is non-negotiable. The system relies on self-declaration, but audits are thorough. - **Filing:** Usually quarterly. Monthly filing is optional for high-volume businesses. - **Deadlines:** Returns and payments are due 60 days after the reporting period ends. - **Invoices:** Must include the supplier's VAT number, tax rate, and clear description of goods. - **Retention:** All relevant documents must be archived for 10 years. - **Penalties:** Late filing triggers fines and interest (currently 4.5% p.a.).

Key Deadlines

Filing VAT Return

Within 60 days after the reporting period ends.

Paying VAT Due

Within 60 days after the reporting period ends.

Penalties for Non-Compliance

Late Filing / Payment

Assessment penalty + default interest.

Current Interest Rate

4.5% per annum on overdue amounts.

Key deadlines and penalties for Swiss VAT

## What is taxable and what is exempt? ### Taxable turnover: goods and services In principle, all goods delivered and services rendered within Swiss territory are taxable. This includes digital services provided to Swiss consumers. The "place of supply" rules determine liability—generally, where the recipient is located for services. ### Operations exempt from VAT Certain sectors are exempt from VAT (tax excluded). This means you do not charge VAT, but you also cannot deduct input tax. Examples include: - Medical treatments and healthcare. - Education and vocational training. - Insurance and finance. - Rental of residential real estate. Note the difference: **Exempt** means no tax is involved at all. **Zero-rated** (like exports) means tax is 0%, but you retain the right to deduct input VAT. ## Recent and future legislative changes (2024–2025) ### Changes effective January 1, 2024 The primary change was the rate increase (Standard: 8.1%, Reduced: 2.6%, Special: 3.8%) to support the pension system. Businesses should have already updated their ERP systems. ### Changes effective January 1, 2025 The landscape shifts significantly for digital commerce: - **Platform Taxation:** Electronic platforms (marketplaces) are now deemed suppliers. They must collect and remit VAT for goods sold by third parties to Swiss customers. - **SME Simplification:** Small enterprises can opt for annual settlement to reduce administrative work. - **Electronic Filing:** Paper forms are obsolete; e-filing is now mandatory. See the [official FTA announcement on 2025 changes](https://www.estv.admin.ch/estv/en/home/value-added-tax/accounting-vat/vat-changes-2025.html). {{cta:cta-1}} ## VAT in practice: examples for different business types ### VAT for e-commerce and online sellers If you sell goods from abroad to Switzerland, the CHF 100,000 global threshold applies. However, under the 2025 rules, if you sell via a major marketplace, the platform often handles the VAT. If you sell via your own shop (Shopify, WooCommerce), you remain liable. ### VAT for freelancers and consultants A freelance consultant living in Zurich must register if their total income exceeds the threshold. However, B2B services provided to foreign clients are generally not subject to Swiss VAT (place of supply is abroad), though they count toward the registration threshold. ### VAT in the hospitality sector Hotels face a mixed calculation. The room and breakfast fall under the special 3.8% rate. However, alcohol from the minibar, spa treatments, or laundry services are taxed at the standard 8.1%. Correctly splitting these on the invoice is critical. ## Common mistakes with Swiss VAT and how to avoid them **Mistake 1: Ignoring Global Turnover.** Many foreign companies only count their Swiss sales. If you earn CHF 200k in Germany and CHF 1 in Switzerland, you must register. **Mistake 2: Wrong Rates.** Applying the 2.6% reduced rate to items that don't qualify (e.g., alcohol or consulting) is a frequent audit flag. **Mistake 3: Invalid Input Deductions.** You cannot claim VAT back on private expenses or exempt activities. **Mistake 4: Missing Deadlines.** The 60-day window is strict. Late filings attract automatic penalties.

VAT in Switzerland 2025: rates, registration and refund