Switzerland: Increase to VAT rates effective 1 January 2024
VAT rates change will increase as of 1 January 2024
VAT rates change will increase as of 1 January 2024
The value added tax (VAT) rates in Switzerland will increase as of 1 January 2024.
The VAT rates change are as follows:
|
As of 1 January 2021 |
New rates |
Standard rate |
7.7% |
8.1% |
Reduced rate |
2.5% |
2.6% |
Special rate for accommodation |
3.7% |
3.8% |
The applicable VAT rate is determined by the time the service is rendered (not the date of invoicing or payment). In the case of periodic services (e.g., subscriptions), the period during which the service is rendered is also decisive. Services rendered until 31 December 2023 are subject to the current VAT rates. Services rendered as of 1 January 2024 will be subject to the new VAT rates.
Even if the time of the service is decisive for whether the old or the new VAT rate applies, the tax liability arises with the issuing of the invoice or the date that appears on the invoice.
In the case of cross-period services, the new VAT rates might already have to be applied. If services that are subject to both the current and the new VAT rates are listed on the same invoice, there are two possibilities according to the practice of the Federal Tax Administration (FTA) how these services can be listed.
- If the services can be separated by date or period provided, the respective share of the amount attributable to it should be shown separately and the VAT rate applicable to the respective period can be applied. For example, services provided in December 2023 and shown on the invoice as such can be invoiced with the current VAT rate of 7.7% and services provided in January 2024 can be invoiced separately with the new VAT rate of 8.1%.
- If the services cannot be shown separately on the invoice, the entire services must be invoiced at the new VAT rates (VAT rates from 2024).
If a service or maintenance contract extends beyond the date of the VAT rate increase, the remuneration must in principle be allocated on a pro-rated basis to the current and the new VAT rate.
In the VAT returns of the third quarter of 2023 (with effective settlement method) and the month of July 2023 (with monthly returns), the turnover can be declared for the first time at both the previous and the new VAT rates.
Read a June 2023 report prepared by the KPMG member firm in Switzerland
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