Swiss VAT for tradespeople: when to register, which rates apply

After the QR-bill, VAT is the subject we get asked about most. Here are the bearings, without the jargon.

The threshold: CHF 100,000

Registration becomes compulsory as soon as your annual turnover passes CHF 100,000. Below that you may register voluntarily, and it is worth thinking about: if you buy a lot of materials, you then reclaim the VAT you paid on them, which can be worth more than the paperwork costs you.

The three rates

• 8.1%, standard rate. It applies to virtually all construction work.
• 2.6%, reduced rate, for food, medicines, books and the press.
• 3.8%, special rate, for accommodation services.

In practice a tradesperson almost always invoices at 8.1%. The other two rates concern them only exceptionally.

What has to appear on your invoice

Your UID number followed by the VAT marker, in the form CHE-123.456.789 MWST. Then, for each rate applied, the amount before tax, the rate and the VAT amount, shown separately, not folded into the total. A VAT-registered client needs them to reclaim their own VAT; without them, they will ask you again.

Two accounting methods

The effective method, where you declare the VAT you collected and deduct the VAT you paid, and the net tax rate method, simpler, where you apply a flat rate to your turnover. The second lightens the bookkeeping considerably but is not always the cheaper one. It is a question to put to your accountant once, properly, rather than settle alone.