Swiss VAT: rates, method and examples

Receipt or quote: behind almost every Swiss price sits VAT. Since 1 January 2024 three rates apply, and converting between net and gross follows a simple formula — yet one that is constantly misapplied. Here is the method without traps.

The three rates since 2024

• Standard rate 8.1%: for almost everything — from car repairs to consulting.
• Reduced rate 2.6%: everyday goods such as food, medicines, books and newspapers.
• Special accommodation rate 3.8%: only for hotel overnight stays with breakfast.

Net or gross? Direction decides

• Net → gross: multiply by 1.081. Example: CHF 1,000 net gives CHF 1,000 × 1.081 = CHF 1,081 gross (CHF 81 of tax).
• Gross → net: divide by 1.081. Example: CHF 1,081 gross gives CHF 1,081 ÷ 1.081 = CHF 1,000 net.
• The classic mistake: subtracting 8.1% from the gross price. That understates the tax — always divide, never subtract.

When do you become liable?

Above CHF 100,000 of taxable annual turnover, registration with the ESTV and quarterly filing are mandatory. Below that, registration is voluntary — useful if your clients recover input tax and you want to show it on invoices.

Flat rates for SMEs

Small businesses with little input tax can opt for industry flat rates (e.g. around 6–7% instead of 8.1%). That massively simplifies filing, but only pays off if your actual input tax sits below the flat rate. Honestly calculate both variants once.

Three calculation mistakes that cost money

• Mistake 1 – subtracting from gross: CHF 1,000 gross minus 8.1% (= CHF 919) is wrong; correct is CHF 1,000 ÷ 1.081 = CHF 925.07 net. Gap: nearly CHF 6 per thousand.
• Mistake 2 – wrong takeaway rate: in restaurants 8.1%, for takeaway food 2.6%. On CHF 10,000 of turnover that is CHF 550 of difference.
• Mistake 3 – picking the flat rate blindly: 6.5% flat sounds better than 8.1% — but if your real input tax is higher, you lose. Calculate both routes once, then decide.

Invoicing correctly: the mandatory details

A VAT-compliant invoice needs — otherwise the client's recovery is at risk:

• Name and address of supplier and recipient.
• Date, nature, quantity and price of the service plus applicable rate.
• Tax amount shown separately (or included-tax note with rate).
• UID number with «CHE» prefix for registered businesses.
• Retention: 10 years, electronic allowed if readability guaranteed.

Mini case: freelance invoice of CHF 5,000

Designer S. invoices CHF 5,000 net. Correct: CHF 5,000 × 1.081 = CHF 5,405 gross (CHF 405 VAT). Frequent mistake: adding 8.1% onto CHF 5,000 i.e. CHF 405 — right here by chance, because we start from net. Critical the other way: if the client states a CHF 5,000 gross budget, CHF 5,000 ÷ 1.081 = CHF 4,625.35 net remains — not CHF 4,595. Gap per invoice: nearly CHF 30. Across 50 invoices a year you give away CHF 1,500.

Check every amount with our VAT calculator, and plan your company's tax burden with SwissCalc's tax calculator.