In contrast, some other forms of taxation, such as income and corporate taxes, impede economic activity and can distort decisions between consumption and investment. VAT returns must be submitted quarterly and annual returns are not required. Brexit* The United Kingdom withdrew from the European Union and is a third country as of 1 February 2020. These cookies will be stored in your browser only with your consent. ; e-commerce marketplace rules) but always with the ability to take into account the specificities of its economy. Your comment could not be posted. A Value-Added Tax (VAT) is a consumption tax assessed on the value added in each production stage of a good or service. But opting out of some of these cookies may affect your browsing experience., The right to correct any incorrect information, The right to specifically opt-in to any future communications, The right to move data to another organisation. Necessary cookies are absolutely essential for the website to function properly. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and global levels. You also have the option to opt-out of these cookies. Stay up on the tax news and analysis that matters to you. Our privacy notice is available in full on our website,, Should you have any queries on the above, kindly email us at, The Old Free School, George Street, Watford, Hertfordshire, WD18 0BX. The VAT registration limit in Switzerland is CHF 100,000 for both established and non-established businesses. View an alternate. Please contact us for further information about paying taxes in Switzerland, and a member of our team will be happy to help you. We work hard to make our analysis as useful as possible. Comments are moderated and will not appear until approved by the author. Switzerland , as a non-EU country, levies the lowest VAT rate of only 7.7 percent, followed by Luxembourg (17 percent), Turkey (18 percent), and Germany (19 percent). The standard rate of VAT is 8%, and reduced rates of 2.5% and 3.8% are available. The letters and numbers you entered did not match the image. Every business along the value chain receives a tax credit for the VAT already paid. Read more. However, Switzerland underwent several VAT revisions to harmonise its legislation with the EU rules and others are expected in the near future (e.g. As a consequence of the rejection of the EEA membership in 1992, Switzerland and the EU agreed on a package of seven sectoral agreements signed in 1999 (known in Switzerland as "Bilaterals I"). However, the country has adopted some aspects of EU law and participates in the EU’s single market. More than 140 countries worldwide – including all European countries – levy a Value-Added Tax (VAT) on purchases for consumption. Error type: Your comment has been saved. VAT rates in Switzerland. Our work depends on support from members of the public like you. No. All rights reserved. Deloitte AG is an affiliate of Deloitte NWE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”). We may also share your personal data with our card payment services provider to enable us to take payment from you by debit or credit card. In the EU Switzerland would have been part of the European single market and would have had to comply with Directive 2006/112/EC (VAT Directive). We'll assume you're ok with this, but you can opt-out if you wish. This website uses cookies to improve your experience while you navigate through the website. There is no VAT limit on distance sales in Switzerland. (nobody). While VAT-registered businesses can deduct all the tax already paid in the preceding production stages, the end consumer does not receive a credit for the VAT paid, making it a tax on final consumption. The Tax Foundation works hard to provide insightful tax policy analysis. Explore our updated web tool to compare tax codes across the developed world. On the other hand, French and Swiss businesses are only exempt from VAT registration if their revenues stay below considerably high thresholds of € 82,200 and € 86,580, respectively. We may share your data where required to be disclosed by law, by any government or other regulatory authority or by a court or other authority of competent jurisdiction provided that and only to the extent it is legally permitted to do so. Some businesses would benefit from specific EU VAT rules; e.g., the “single entity principle” whereby a Swiss head office would not have to self-assess Swiss VAT on charges by its foreign branches, financial services to recipients outside the EU would open the right to recover input VAT, etc. We will not share your information with any 3rd parties. These cookies do not store any personal information. 25 years after the introduction of VAT in Switzerland, we reflect on how the Swiss VAT landscape would look like if Switzerland were part of the EU. Email address will not be displayed with the comment.). For example, a Swiss bank acquiring software for CHF 1 million used for a VAT exempt activity faces now a VAT cost of CHF 77k. For Switzerland, the higher EU VAT rate would imply price increases in almost all daily goods and services and some businesses would be affected as well. The current VAT system was introduced in Switzerland in 1995.At the moment it is placed under the guidance of the Federal Tax Administration, that established the rules related to the returns, compliance and registration of Swiss VAT for non-resident traders. The final VAT levied on a good or service is the sum of the VAT paid at each production stage. Steven is a Tax Consultant at the Deloitte Geneva office. What would have been the VAT impact of being part of the EU? Every company must hold a number like this in order for accurate taxation. This prevents automated programs from posting comments. Please try again. Read moreShall We Call You* ---YesNoSubscribe to our newsletter* ---YesNo, Accountancy In Europe Ltd and its subsidiaries will use your email address to provide business news, offers and services we think will be of interest. Yes, but only when a reciprocity agreement is in place.

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