Who needs to register for Swiss VAT?
Swiss and foreign companies are required to register for VAT if they meet certain conditions, in particular those relating to sales generated.
VAT registration threshold
If annual sales exceed CHF 100,000, VAT registration is compulsory. This applies to all legal forms, including public limited companies (SA), limited liability companies (Sàrl), and sole proprietorships.
Companies with a turnover of less than CHF 100,000 can register voluntarily to VAT. This option is particularly advantageous for reclaiming VAT paid on purchases.
Foreign benefits
Companies based in the outside of Switzerland who provide services in the country are also subject to the obligation to register for VAT based on the same sales criteria.
Exceptions for associations
Certain non-profit sports and cultural associations run on a voluntary basis benefit from a higher threshold (CHF 250,000) before having to register for VAT.
Why register for VAT?
Although a company doesn't always have a choice, registering for VAT has a number of advantages.
Recovery of VAT on purchases
Once registered for VAT, the company can recover VAT paid on purchases and expenses related to its business activity. This is particularly advantageous for companies making important investments .
Credibility with customers and partners
Registering for VAT can improve credibility of a company in the eyes of customers, business partners and suppliers. As a VAT-registered company, it is perceived as having a high turnover, which can inspire confidence.
VAT registration process
1. Entry in the Commercial Register
To register for VAT in Switzerland, you'll need various data about your company, which will only be available once the company has been entered in the Swiss Trade Register (except for foreign companies). Documents required include:
- Extract from the Trade Register and Business Identification Number (BIN)
- Estimate (new company) or sales achieved (established companies)
- Social insurance number (for RIs, associations, foundations, simple companies)
- Tax representative details (foreign companies)
2. Fill in the online registration form
Visit the FTA's website (Federal Tax Administration) and access the section dedicated to VAT registration.
Fill in the online registration form. You must provide the information listed in the point 1.These include the name, address, IDE number, legal form and estimated sales of the company to be registered.
3. Confirmation
It can take up to three working days to transmit your commercial register data to the IDE register. Once you have submitted your online registration, you will receive a transmission confirmation that will appear on the screen, including a PDF file.
You can download it as proof of registration.
Once the registration has been approved, the FTC will issue a unique VAT number. This number is essential and must be quoted on all invoices and commercial documents.
What are the disadvantages of VAT registration?
Most of the time, it is more advantageous to register for VAT than not to do so. However, there are certain disadvantages for small businesses..
Heavy administrative burden
A VAT-registered company must draw up and submit regular VAT statements (quarterly or half-yearly, depending on the method chosen). This means keeping accurate accounts, collecting and declaring VAT on sales, and managing deductions from VAT paid on purchases.
What's more, VAT rules are complex, due to the numerous legal books on the subject. It is therefore strongly recommended to call on the services of a specialized VAT trustee.
Passing on VAT to the end customer
The company has to charge VAT to its customers, which can increase the final price of goods or services. This can make the company less competitive. This is particularly true for companies not subject to VAT, such as small or micro-businesses, or private individuals.
VAT credit management
When a company pays more VAT on its purchases than it collects on its sales, it must claim a reimbursement to the Federal Tax Administration (FTC). The repayment period can sometimes be long, which can affect the cash flow of the company.
How do I unsubscribe from VAT?
In case of cessation of activity or if sales fall below the threshold , the company must take administrative steps to deregister from the VAT register. The procedure can be lengthy, and requires the provision of evidence such as a balance sheet and proof of sales.
Before unsubscribing, the company must submit a final VAT statement. This statement must include all transactions up to the date of cessation of liability, and settle any outstanding balances.
In case of transformation of the company, resulting in a change of VAT number (for example, a sole proprietorship becoming a SARL), the company must unsubscribe and re-register in its new form.
Frequently Asked Questions
Can I change the data submitted in the online registration form?
Once the online registration has been submitted, it is not possible to make corrections. Please double-check all the information before submitting your request.
Can I voluntarily register for VAT even if my sales are less than CHF 100,000?
Yes, companies that do not exceed the threshold of CHF 100,000 of sales can voluntarily register for VAT. This enables them to reclaim VAT on their purchases and investments, and strengthens their commercial credibility.
How do I register for VAT in Switzerland?
Registration is done online via the Federal Tax Administration (FTA). You will need to provide information about your company (extract from the commercial register, IDE number, social insurance number, etc.) and complete a registration form. Once approved, you'll receive a unique VAT number.
How do I unsubscribe from VAT in Switzerland?
To deregister, you need to submit a formal request to the FCA, accompanied by evidence to justify your deregistration (drop in sales below CHF 100,000 or cessation of activity). You will also need to provide a final VAT statement. The FTA will examine the application and confirm deregistration if the conditions are met.
When can I request VAT deregistration?
- If your annual sales fall below CHF 100,000 and are not expected to exceed it in the following year.
- In the event of company closure or liquidation.
- If you convert your business and obtain a new VAT number.
What are the deadlines for VAT deregistration?
- The request must be sent within 60 days following the end of the fiscal period during which sales fell below CHF 100,000.
- In the event of cessation of activity, the request must be submitted within 30 days following termination.
Do I need to keep my documents after unsubscribing?
Books and records must be kept for 10 years, and documents relating to real estate must be kept for 20 years, even after VAT deregistration.
