Swiss VAT rates and VAT compliance

Switzerland sets its own VAT rates.  It is not part of the European Union, so does not need to follow any of the guidance on rates (e.g. the standard rate of 15% or above).  Suppliers of goods or services VAT registered in Switzerland must charge the appropriate VAT rate, and collect the tax for onward payment to the Swiss tax authorities through a VAT filling: see Swiss VAT returns briefing.

The current rates are:

• Switzerland standard VAT rate: 7.7%.
• Switzerland reduced VAT rate: 3.7% (Hotels).
• Further reduced VAT rate: 2.5% (Foodstuffs, books, foodstuffs, water).
• Exempt from Swiss VAT: insurance, financial services, education, health.

Non-resident companies operating in Switzerland will have to follow the local rules on VAT invoicing, bookkeeping and tax rates.  This includes:

• Preparing invoices with the disclosure details outlined in the federal VAT laws.
• Electronic invoices with proper signature, authenticity and agreement by the recipient.
• Maintenance of accounts and records, which must be held for at least 10 years.
• Correct invoicing of customers for goods or services in accordance with the Swiss time of supply VAT rules.
• Processing of credit notes and other corrections.
• Use of approved foreign currency rates.

The tax point (time of supply) rules in Switzerland determines when the VAT is due.  It is then payable to the tax authorities 30 days after the VAT reporting period end (monthly or quarterly).

For most goods, it is the time of delivery or passage of title.  For services, it is the completion of the service.

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