Value added tax (VAT) is a consumption tax applied to domestic goods or services and it is owned by the Swiss Federal Tax Administration. VAT is imposed to producers, manufactures, tradesmen, retailers and service providers. Once a company is registered with the Commercial Registry, it will also have to be VAT registered. Foreign companies also have to abide VAT laws on Swiss territory.
The Swiss Confederation levies VAT as it follows:
The entities that have to pay VAT in Switzerland are:
The new VAT law enforced in 2010 has set the new threshold for tax liability at 100.000 CHF.
There are also companies that are exempt from paying VAT. These are companies with less than 100.000 CHF turnover, non-profit, voluntarily managed organizations with less than 150, 000 CHF turnover, or companies based outside Switzerland that provide services and are only subject to the acquisition tax.
The standard tax rate is 8%, the lowest in Europe, and it is applied to most goods and most of services, but there are also exceptions such as food and non-alcoholic drinks, medicines, certain newspaper, magazines and books that are taxed with 2,5% and tourism rates for hotel accommodation including breakfast subjected to 3,8% VAT.
The registration process for paying the VAT is quite simple and it only requires few steps:
For more information about the VAT tax or other taxes in Switzerland please contact us. Our attorneys in Switzerland will be at your disposal with qualified legal advice and personalized consulatcy for each business.
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