Swiss VAT 2024: new rates from 1 January and what changes for businesses
From 1 January 2024, value added tax (VAT) rates in Switzerland will increase compared with the previous system. This adjustment is part of the tax measures approved by the authorities to keep public finances sustainable and bring the tax system into line with current economic levels.
The changes mainly concern the rates for the effective method and have already been officially announced by the Swiss Federal Tax Administration (FTA).
VAT returns in the 2023/2024 transition period
What are the new VAT rates from 1 January 2024?
The main changes to Swiss VAT rates compared with the previous period:
| Type of rate | Until 31 December 2023 | From 1 January 2024 |
|---|---|---|
| Standard rate | 7.7% | 8.1% |
| Reduced rate | 2.5% | 2.6% |
| Special rate (accommodation sector) | 3.7% | 3.8% |
The new rates apply to taxable transactions carried out from 1 January 2024 onwards. The rate to apply depends on the date the service is performed or the goods are delivered, not on the date the invoice is issued.
Note: These percentages refer to the effective method of calculating VAT; there are also net tax rates and flat tax rates, which change in a similar way in 2024.
When the new rates apply
The higher rates apply only to services or deliveries carried out from 1 January 2024. For those carried out before that date, the previous rates still apply, even if the invoice is issued later.
In addition, for reporting purposes, the new rates were first made available in the VAT returns for the third quarter of 2023, the second half of 2023 and up to July 2023, according to the instructions published by the tax authorities.
Practical impact on SMEs
Businesses need to consider several operational aspects:
Updating prices and price lists
With the VAT increase, it is important to update price lists, till systems and online shops so that they correctly reflect the new rates.
Management and invoicing software
Accounting and invoicing software must be set up to apply the new rates automatically from 1 January 2024.
VAT return
VAT records must clearly separate transactions before and after the new rates come into force, so that the tax return is correct.
Net tax rates and flat tax rates: what changes
As well as the effective rates, the increase also changes the net tax rates and flat tax rates used by some businesses, depending on their VAT reporting method. For example:
| Net tax rates and flat tax rates until 31 December 2023 | Net tax rates and flat tax rates from 1 January 2024 |
|---|---|
| 0.1% | 0.1% |
| 0.6% | 0.6% |
| 1.2% | 1.3% |
| 2.0% | 2.1% |
| 2.8% | 3.0% |
| 3.5% | 3.7% |
| 4.3% | 4.5% |
| 5.1% | 5.3% |
| 5.9% | 6.2% |
| 6.5% | 6.8% |
These changes mainly affect those using methods other than effective accounting and should be taken into account in tax planning.
Tips for handling the VAT increase
Draw up a checklist straight away:
- update your software and invoicing systems;
- tell customers about any price changes;
- check any contracts with rates already agreed;
- talk to your fiduciary or tax adviser to avoid mistakes in your VAT return.
Some technical details are covered in more depth in the Swiss Federal Tax Administration’s official document on the new rates.
Revised turnover and tax liability limits for using the net tax rate method.
| Until 31 December 2023 | From 1 January 2024 | |
|---|---|---|
| Turnover limit for using the net tax rate method: | CHF 5,005,000 | CHF 5,024,000 |
| Tax liability limit for using the net tax rate method: | CHF 103,000 | CHF 108,000 |
Further details on the tax rate increase
These are available in VAT Info 19, “Increase in tax rates from 1 January 2024”.
easy4you can support you in adapting to the new VAT rates
Adapting a company’s accounting and tax systems to the VAT increase is not always easy, especially for SMEs without a dedicated in-house administration department.
easy4you can help you:
✔ update your invoicing and accounting system;
✔ check that the rates are applied correctly;
✔ with your VAT return;
✔ train your team on how to handle the change.
Would you like a free consultation on handling VAT in 2024? Contact us to arrange a personal appointment.
Conclusion
The VAT rate increase from 1 January 2024 is an important step for all businesses operating in Switzerland. Preparing in good time means avoiding operational and tax errors and ensuring compliance and business continuity.
If you are unsure how to handle the rate update or want to optimise your VAT accounting, write to us.
