Switzerland: A Tax: Indirect Tax Overview
Switzerland’s indirect tax system is built around a federal value-added tax (VAT), complemented by customs duties, import VAT, and selected federal excise taxes. VAT is a net multi-stage consumption tax and is currently being modernised through the 2025 partial revision of the VAT Act, the recent abolition of most industrial tariffs, and a forward-looking agenda around platform taxation and digital services.
The Swiss VAT and Customs System
Supplies of goods and services carried out in Switzerland are currently subject to VAT at a standard rate of 8.1%, while goods for basic needs benefit from a reduced rate of 2.6% and accommodation services in the hotel and accommodation business (eg, letting of holiday apartments) are taxed at a special rate of 3.8%. Any person independently carrying on a commercial or professional activity with the aim of sustainably earning income and acting externally under their own name is, in principle, liable to VAT, regardless of legal form or profit motive, if they are providing supplies in Switzerland and unless a specific exemption applies (eg, if the threshold of CHF100,000 of worldwide turnover is not reached). This includes foreign companies providing supplies in Switzerland. In addition, since 2019, foreign mail-order businesses with at least CHF100,000 of annual turnover from small consignments to Switzerland are treated as Swiss taxpayers.
VATable persons must register with the Swiss Federal Tax Administration (SFTA) within prescribed deadlines and may deduct input VAT incurred on purchases and imports to the extent these are used for taxable or zero-rated (fully exempt) activities. Some supplies are exempt from tax without credit, such as hospital treatment, many cultural services, insurance and reinsurance, and certain financial transactions, which means input VAT related to these activities is not recoverable (except where a taxpayer opted for VAT taxation of the respective supplies, to the extent possible), whereas exports and other fully exempt supplies allow full input VAT deduction. VATable persons typically file quarterly VAT declarations (with the possibility to request a switch to an annual declaration in certain cases).
The inland VAT is accompanied by an acquisition VAT, for which the SFTA is also the responsible authority. Services subject to the residence-of-beneficiary principle purchased from a non-Swiss VAT-registered foreign provider are subject to the acquisition VAT. Swiss VAT-registered purchasers report the acquisition VAT in their ordinary VAT returns and might, in parallel, claim an input VAT deduction. Non-Swiss VAT-registered purchasers need to report and pay acquisition VAT separately in case they import services in excess of CHF10,000 per calendar year. An important exception from this acquisition VAT regime applies for non-Swiss providers of electronic services to non-Swiss VAT-registered recipients – such providers become subject to Swiss VAT upon their first turnover in Switzerland if they have a worldwide turnover of at least CHF100,000.
Lastly, all goods imported into Switzerland are in principle subject to import VAT at a rate of 8.1% or 2.6% and, in certain cases, customs duties or special excise duties with the Federal Office for Customs and Border Security (FOCBS) as overseeing authority.
The Swiss VAT and customs system is in the process of continuously being adapted with the objectives of pushing for digitalisation, creating leaner compliance structures, and ensuring that new business models (especially in the digital world) are conceptually grasped by the system.
2025 Partial Revision of the VAT Act
After the introduction of a mail-order scheme in 2019, a partial revision of the VAT Act and VAT Ordinance entered into force on 1 January 2025, which notably introduced a deemed-supplier model for electronic platforms facilitating sales of goods. Under the platform taxation rules, where goods are sold via an electronic platform, the platform is treated as if it purchases the goods from the underlying supplier and resells them to the Swiss customer. From a VAT perspective, two supplies are assumed: a first supply between the seller and the platform and a second between the platform and the customer, with the platform required to charge, collect, declare and remit VAT on the customer-facing supply. An information obligation requires all online platforms to provide the SFTA, upon request, with data on suppliers whose activities could trigger Swiss VAT registration, and the authority may impose measures such as import bans or, in the last resort, destruction of consignments and publication of company names in cases of persistent non-compliance.
The partial reform was, apart from the extension of the acquisition tax regime to, inter alia, the trading and transfer of emission rights, and some technical changes (eg, broadening the catalogue of VAT-exempt services), accompanied by various measures to simplify compliance. These included allowing SMEs with an annual turnover of up to around CHF5 million to opt for annual (instead of quarterly, half-yearly or monthly) VAT returns or the introduction of the possibility for the SFTA to waive the requirement of a local fiscal representative for foreign suppliers. In parallel, as from 1 January 2025, the SFTA only accepts online VAT declarations over the designated portal (ie, it has abolished the possibility of filing VAT declarations in paper form).
Recent Abolition of Most Industrial Tariffs
On 1 January 2024, Switzerland abolished customs duties on most industrial products and simplified the customs tariff structure, setting tariff rates for almost all industrial goods to zero, with limited exceptions for some industrially produced agricultural items. The reform aimed to reduce import costs and administrative burdens, particularly tariff classification work, but it obviously did not remove the obligation to declare goods at the border or affect other import-related charges such as automobile tax, mineral oil tax, or VOC (volatile organic compounds) taxes.
Future Reforms and Trends
Looking ahead, Switzerland is considering extending the platform taxation model from goods to electronic services, reflecting international trends in digital economy taxation. In December 2025, the Federal Council launched a consultation on amendments to the VAT Act that would extend deemed-supplier rules to certain digital services (such as app downloads, software, media streaming and other electronic content), while generally excluding gig-type services such as ride-hailing and accommodation intermediation.
Under the proposal, platforms facilitating electronic services would be treated as the supplier for VAT purposes and required to register, charge, and remit VAT on supplies to Swiss customers, potentially relieving many non-resident e-service vendors selling exclusively through such platforms from Swiss registration. This would align the treatment of goods and digital services sold via platforms, simplify enforcement by concentrating obligations on a smaller number of large intermediaries, and bring Swiss practice closer to the emerging global standard for platform-based VAT collection.
A total revision of the Swiss customs law is scheduled to be implemented soon, which aims at further modernising, digitalising and streamlining the import and customs processes, inter alia, with simplified, electronically processed declaration procedures.
Within this evolving framework, the core structure of a centralised federal VAT at moderate rates, complemented by streamlined customs duties and targeted excise taxes, is likely to remain stable, with reforms focusing on digitalisation, enforcement efficiency, and alignment with changing business models.