VAT registration in Switzerland. Obtaining a VAT number

Switzerland is the richest country in Europe. In a way, its favourable taxation system and low value-added tax rate contribute to its solid position in the global economy. Switzerland also has one of the lowest corporate income taxes in Europe. The main rate of this tax is 8.5%, additional tax rates are regulated by the local authorities.

The incentives that are available for mixed-type companies are attractive. What is a mixed type company? It is one which has been established with foreign capital. The benefits of starting a VAT-paying company in Switzerland are therefore clear.

Tax holidays are a real opportunity to give a boost to business development in Switzerland. They are usually easiest to obtain for companies that have created a sufficient number of jobs.

Tax legislation is harmonised at cantonal/communal level, and most tax rules are identical or very similar.

The main taxes in Switzerland: What you need to know about them

If the total supply of goods, services and self-consumption in Switzerland exceeds CHF 100,000, the company pays VAT. This is the responsibility of the Swiss Federal Tax Administration in Berne.

The Swiss tax authorities are subject to federal and cantonal laws. Tax officials are courteous, friendly and helpful. Every taxpayer is treated as a business partner.

There are three levels of taxation in the country: federal, cantonal and local. The federal level is responsible for personal and corporate income tax. The cantonal level and the local level are usually taxes on land and advertising.

What tax changes have occurred in Switzerland in 2020?

Companies will pay lower taxes than they did before the tax reform was introduced. Corporate tax rates across the country will now be between 12% and 15%, with the most significant reduction in Geneva.

VAT, on the other hand, has not been affected by the reform. For food and medicines, the tax rate is only 2.5% - the lowest in Europe. There is still no VAT due if your company's annual turnover is less than CHF 100,000. Once registered with the Federal Tax Office, the taxpayer receives a VAT number.

Taxes on dogs, rubbish and amusement facilities - these are the kinds of deductions to the treasury that we are not used to. In Switzerland, they are.

You can apply for a VAT refund cheque under certain conditions. All large department stores have this option. If you decide to go to Switzerland, you can save money on your purchases. But you have to do your VAT refund correctly, otherwise it can be forcibly deducted from your credit card. We don't think you need such surprises, right. You have to take the purchased goods out of the country within 30 days.

All the changes, although adopted a year earlier, come into effect on 1 January 2021.

Together with a successful banking system, Switzerland's tax system makes it an attractive country for foreigners to do business in. You can also choose this jurisdiction. You can decide with an expert which one is best for you. There are many factors to consider, from geographic location, tax rules and mentality. If you have any questions about VAT in Switzerland, Crystal Tax will advise you promptly:

• by telephone;
• by e-mail;
• via online chat.