Switzerland VAT Service
Looking to expand your ecommerce business to Switzerland, FZCO’s guide to VAT in Switzerland service.
VAT registration in Switzerland
Switzerland VAT registration is a consumption tax that is levied on the sale of goods and services. Switzerland operates a system of voluntary VAT registration, which means that businesses with an annual turnover of less than CHF 100,000 are not required to register for VAT. However, businesses with an annual turnover of CHF 100,000 or more must register for VAT and charge VAT on their sales.
Registered businesses are required to submit regular VAT return to the Swiss tax authorities, detailing the amount of VAT charged on their sales and the amount of VAT paid on their purchases. VAT returns must be submitted on a quarterly basis, and the tax authorities may carry out audits to ensure compliance with VAT regulations.
Businesses must indicate their VAT number on invoices. This is made up of the business identification number and the suffix MWST/TVA/IVA (= VAT in German, Italian, French). Every Swiss company has a business identification number. This UID can be requested online.
When should I register for VAT in Switzerland?
In Switzerland, businesses must register for VAT if their annual turnover exceeds CHF 100,000. However, businesses that do not exceed this threshold may choose to register for VAT voluntarily.
If your business is likely to exceed the annual turnover threshold, it may be beneficial to register for VAT voluntarily. This can allow you to reclaim VAT paid on purchases, which can help reduce your costs.
Additionally, registering for VAT can improve your credibility with customers and suppliers, as it shows that your business is established and legitimate.
It is important to note that once you register for VAT in Switzerland, you will be required to charge VAT on your sales and submit regular VAT returns to the tax authorities. This can involve additional administrative work and may require you to adjust your pricing to account for the VAT.
Switzerland VAT rate
The current standard VAT rate in Switzerland is 7.7%, which is applied to most goods and services. However, certain goods and services are subject to a reduced VAT rate of either 2.5% or 3.7%.
What documents required for VAT number in Switzerland?
To register for VAT in Switzerland, you will typically need to provide the following documents:
- Application form: You will need to complete an application form for VAT number, which can be obtained from the Swiss Federal Tax Administration (FTA).
- Business identification documents: You will need to provide identification documents for your business, such as a commercial register extract, articles of association, or business license.
- Personal identification documents: You will need to provide identification documents for the person(s) responsible for the business, such as a passport or identity card.
- Proof of residency: If you are not a resident of Switzerland, you may need to provide proof of your residency in your home country.
- Bank account information: You will need to provide information about your business bank account, including the name of the bank, the account number, and the IBAN.
- VAT declaration form: You will need to provide a declaration of the expected turnover of your business for the next 12 months.
It is important to note that the specific requirements for VAT account may vary depending on the type of business you have and your individual circumstances.
Switzerland VAT Returns
Businesses that are registered for VAT must submit regular VAT returns to the Swiss tax authorities. VAT returns are used to report the amount of VAT charged on sales and the amount of VAT paid on purchases during a specific period.
VAT returns in Switzerland are usually submitted on a quarterly basis, although businesses with a turnover of less than CHF 5 million may be eligible to submit VAT returns on an annual basis.
To complete a VAT return in Switzerland, you will typically need to provide the following information:
- Sales information
- Purchase information
- VAT adjustments such as for returns, bad debts, or discounts.
- Other information: You may need to provide additional information, such as the VAT number of your customers or suppliers, or details of intra-community transactions.
Once you have completed your VAT return, you will need to submit it to the Switzerland tax along with any payment due. It is important to ensure that your VAT return is submitted on time and that all information is accurate, as late or incorrect VAT returns can result in penalties and interest charges.
If you are unsure about whether or not to register for VAT in Switzerland, it is recommended that you seek professional advice from a tax advisor or accountant. They can help you assess the benefits and drawbacks of registration and guide you through the registration process.