Swiss VAT: a practical guide for small businesses (2026)

What Swiss VAT (AFC) is — who has to pay it and why

VAT (Value Added Tax) is the main indirect tax in Switzerland, administered by the Federal Tax Administration (AFC) based in Bern. It works similarly to European VAT: the final consumer pays it, but it is collected and remitted to the AFC by businesses along the entire sales chain.

If you're a freelancer in Switzerland, a craft business, a consultant or a studio of any kind, VAT concerns you the moment you invoice for services or sell products in Switzerland. The question isn't "if" — it's "how much" and "when".

VAT is governed by the Federal Act on Value Added Tax (LIVA) of 12 June 2009, in force since 1 January 2010 and updated several times (the last major update was on 1 January 2024, with the rates you'll see below).

The 2026 VAT rates: 8.1% / 2.6% / 3.8% / exempt

Since 1 January 2024, the Swiss VAT rates have been:

Important: exempt does not mean "outside VAT". It means the rate is 0%, but you still have to record the operations in the VAT calculation (and if you're on the effective regime, you lose the right to deduct input VAT on the related costs).

The CHF 100,000 threshold — above and below

The golden rule: if your annual turnover is below CHF 100,000, you are not required to register for VAT. This covers most new freelancers, first-year small businesses, part-time activities.

Below the threshold means:

• You have no AFC VAT number.
• You don't have to file quarterly/half-yearly returns.
• Your invoices do not contain VAT (and at the bottom you add a note like "Not subject to VAT pursuant to Art. 10 para. 2 LIVA").
• You cannot deduct input VAT on your purchases (you pay the supplier's gross price).

Crossing the threshold? You have 30 days from the moment you reach it to register with the AFC. From that point you're assigned a VAT number (CHE-xxx.xxx.xxx IVA) and you start invoicing with VAT.

Voluntary registration: pros and cons

Even if you're below the threshold, you can choose to register voluntarily. Is it worth it? It depends.

When it's worth it

• You work mostly B2B with VAT-registered customers: for them, the VAT you charge is deductible, so the final price is unchanged. You, however, recover input VAT on your costs (laptop, software, training, office rent).
• You have significant initial investment costs (a dental practice buying machinery, an IT freelancer setting up a server lab).
• You export: as you'll see below (Art. 23 LIVA), exports are exempt but with the right to deduct. Without VAT registration, you just pay input VAT and that's it.

When it's NOT worth it

• You work B2C (private customers, not registered): for them VAT is a net cost, so charging it makes you 8.1% more expensive.
• You have few business costs: the bureaucracy of the half-yearly return may not be worth the benefit.

Effective vs. balance (saldo) method — which to choose

Once registered, you have to choose how to calculate the VAT to remit. Two methods:

Effective method

The "classic" method. For each period:

1. You sum the VAT collected on your invoices (debt).
2. You sum the VAT paid on your costs and investments (credit = input VAT).
3. You pay the AFC the difference (debt − credit).

Pro: more precise, maximum benefit if you have a lot of VAT-bearing costs.
Con: requires more detailed bookkeeping, reconciliation of every invoice received.

Balance (saldo) method

Available only for those with turnover up to CHF 5,024,000 per year and VAT debt below CHF 108,000. The AFC assigns you a flat-rate coefficient for your activity. You simply pay: gross turnover × coefficient.

Pro: simplified bookkeeping, quarterly return becomes half-yearly.
Con: no input VAT deduction, so if you have many costs it's less advantageous.

Balance (saldo) coefficients for common activities

The AFC publishes a table of coefficients for each NOGA activity code. Some examples:

Example: you're a consultant in Switzerland with an annual turnover of CHF 180,000. With the balance method at 6.2%, you pay the AFC CHF 11,160 per year (180,000 × 6.2%). With the effective method: you collect VAT at 8.1% (= CHF 14,580 gross on your net turnover), minus input VAT on your costs (laptop, software subscriptions, training). If input VAT is less than CHF 3,420, the balance (saldo) method wins.

VAT filing: when and how

AFC deadlines depend on the method chosen:

• Effective method → quarterly return (4 times a year: Q1, Q2, Q3, Q4).
• Balance (saldo) method → half-yearly return (twice a year).

The return is filed online through the AFC ePortal (eportal.admin.ch). You have 60 days from the end of the period to file and pay any debt. In case of delay, late-payment interest applies at the rates published by the AFC (consult the official website for the rate in force).

Vidima generates a VAT summary with totals ready to copy into the AFC form fields. You fill in the official form on the portal; Vidima gives you the exact numbers without manual calculations.

Export and Art. 23 LIVA (export exemption)

If you sell products or services to customers abroad (both EU and non-EU), Art. 23 LIVA lets you exempt the operation from VAT. The invoice is issued at 0% rate, with a clear note "Export exempt from VAT pursuant to Art. 23 LIVA".

Typical cases:

• An IT consultant in Switzerland invoicing a company in Milan (service: place-of-recipient rule applies, exempt in CH).
• A craftsman in Switzerland selling furniture shipped to Germany (goods: exempt with export customs declaration).
• An architect in Switzerland designing a house in Italy (real-estate service: place-of-property rule applies, exempt in CH).

Important: if you're on the effective method, Art. 23 operations still give you the right to deduct input VAT on the related costs. This is one of the main reasons to register for VAT voluntarily even below the threshold, if you export a lot.

Most common mistakes by new business owners

• Forgetting to monitor the threshold. You cross CHF 100,000 in September, you notice in March of the following year, and you end up with 6 months of VAT to remit retroactively plus interest.
• Confusing "exempt" with "outside the scope of VAT". They are different things. Exempt items enter the VAT accounts (at 0% rate); out-of-scope items (e.g. fines, pure donations) do not.
• Calculating VAT on the net instead of the gross. CHF 100 + 8.1% VAT = CHF 108.10. Not CHF 100 gross with VAT "included" of CHF 8.10 (that would correspond to an 8.81% rate).
• Not distinguishing EU B2B from non-EU. The rules for services vs. goods and EU vs. non-EU are different. Vidima has presets for all these cases.
• Choosing the balance (saldo) method "forever" without doing the maths. If your activity changes (more costs, more investments), switching to effective can recover thousands of CHF per year.

How Vidima helps you with VAT

Vidima is designed for Swiss small businesses and freelancers. For VAT:

• Supports both methods (effective + balance/saldo) — reconfigurable at any time.
• Multiple rates per single invoice. You can have one line at 8.1% and another at 2.6% in the same invoice, with separate VAT calculation per rate.
• VAT summary for the AFC. Totals per form field (month or quarter) ready to copy into the AFC ePortal. Vidima does not connect directly to the AFC: you fill in the form, but the numbers are already calculated.
• VAT-number validation in AFC format CHE-xxx.xxx.xxx IVA for each CH customer (verifies the check digit).
• 100k threshold monitor always visible on the dashboard, with a warning when you're approaching it.
• Art. 23 LIVA export presets for non-CH customers.
• Automatic reconciliation via camt.053 from Swiss banks (PostFinance, UBS, Raiffeisen, ZKB, etc.).

All for CHF 149, one-time. See also our QR-Bill guide and the digital seal page.