Small resident enterprises may switch to annual VAT reporting with 3 annual payments of VAT due
Switzerland’s Federal Tax Administration (FTA) has released detailed guidance concerning amendments to the nation’s value-added tax (VAT) system, effective January 1, 2025.
At the same time, there are a number of other Swiss VAT changes for 2025:
- Deemed supplier marketplaces, similar to EU
- Plans for a potential 2026 Swiss VAT rise
- New Swiss VAT filing portal
- Other 2025 Swiss VAT changes
Check our Switzerland VAT guide for more details.
Criteria for Swiss VAT annual returns
Under the revised VAT regime, taxable entities with an annual turnover not exceeding CHF 5,005,000 may elect to submit VAT returns and claim input tax deductions on an annual basis, instead of quarterly, semi-annually, or monthly. This provision is designed to reduce administrative burdens for small and medium-sized enterprises (SMEs).
To qualify for annual VAT filing, taxpayers must demonstrate a consistent compliance record, including timely submission of VAT returns and prompt payment of VAT liabilities. The FTA’s guidance specifies that businesses can submit requests to switch to annual filing via the ePortal, with the option to make this change available starting January 2025. Taxpayers wishing to revert from annual filing to a more frequent reporting schedule must submit their request no later than the end of February.
Taxpayers opting for the annual filing regime are required to make periodic instalments based on their previous year’s VAT liability. Standard instalment due dates are May 30, August 30, and November 30. However, taxpayers applying the net tax rate method are subject to a single instalment payment, due by August 30. Non-compliance with payment schedules or filing obligations may result in penalties or exclusion from the annual filing option.
Eligibility for annual filing is also contingent on maintaining turnover below CHF 5,005,000 for three consecutive reporting periods. Taxpayers exceeding this threshold or failing to submit their annual VAT declaration on time, or to pay the full tax liability by the deadline, will lose eligibility for the annual filing frequency.
General VAT Rules in Switzerland
Switzerland’s VAT system operates under the framework established by the Federal Act on Value Added Tax. The VAT rates include a standard rate of 8.1%, a reduced rate of 2.6% for essential goods and services (e.g., food and books), and a special rate of 3.6% for accommodation services. Businesses must register for VAT if their global turnover exceeds CHF 100,000 per annum.
Swiss VAT operates on a self-assessment basis, requiring taxpayers to calculate and remit VAT on taxable supplies while deducting input tax on business-related expenses. Filing frequencies (monthly, quarterly, or annual) depend on turnover and the taxpayer’s chosen method of calculation. Non-resident businesses making taxable supplies in Switzerland are also required to register and comply with Swiss VAT obligations.
The FTA’s VAT guidance emphasizes the importance of accurate record-keeping and timely compliance to avoid interest charges or administrative penalties. The recent introduction of the annual filing option demonstrates Switzerland’s commitment to streamlining VAT compliance for SMEs while maintaining robust oversight of tax obligations.
