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Swiss VAT: the 2025-2026 changes SMEs need to know

In a nutshell. In 2026 the Swiss VAT rates remain unchanged: 8.1% standard, 2.6% reduced, 3.8% special for accommodation. The most important change is the partial revision of the LIVA (Swiss VAT Act) in force since 1 January 2025: annual return for SMEs up to CHF 5 million, new rules for digital platforms, broader exemptions for travel agencies and healthcare. For SMEs these are concrete changes that affect the administrative burden — if you know them, you take advantage of them.

The VAT rates in force in 2026

The rates in force in Switzerland in 2026 are those introduced on 1 January 2024 (increase linked to AVS/AI financing) and will remain unchanged for the whole year:

(Source: FTA / estv.admin.ch — values in force since 1 January 2024, confirmed for 2026.)

No change to the rates is foreseen for 2026. The next potential VAT-related change is the financing of the 13th AVS pension (increase of 0.5–0.7 points), but it is still under parliamentary discussion and not yet in force.

The partial revision of the LIVA: what changes from 2025

On 1 January 2025 the partial revision of the VAT Act (LIVA) came into force, with several concrete changes for businesses. It is worth taking stock of these because they affect daily management.

Annual VAT return for SMEs

This is the most important novelty for small and medium-sized enterprises. Until 2024, VAT returns were quarterly for most companies (4 returns per year). From 2025, SMEs with annual turnover up to CHF 5,005,000 (VAT included) may choose to file a single annual return.

How it works in practice:

• The application is submitted via the FTA ePortal by 28 February of the relevant year. New taxpayers have 60 days from receipt of the VAT number.
• Essential condition: all previous returns must have been filed and paid on time — anyone in arrears cannot access the annual scheme.
• Payment is not made in one go: it is paid in 3 instalments (30 May, 30 August, 30 November) for the effective or flat-rate method, and in 1 instalment (30 August) for the balance-rate method. The instalments are calculated on the tax of the last tax period.
• The actual return (annual summary) is filed by 28 February of the following year.
• If the CHF 5,005,000 threshold is exceeded for 3 consecutive periods, or a payment is missed, the annual scheme is revoked.

The advantage is real: 1 return per year instead of 4, with the resulting saving of time and accounting simplification. For many SMEs it is one of the most useful simplifications of recent years.

Digital platforms and distance sales

From 1 January 2025, digital platforms that manage distance sales of physical goods imported into Switzerland (Amazon, eBay, AliExpress and the like) become directly responsible for the collection and payment of VAT for third-party sellers operating through them. The aim is to eliminate a grey zone that allowed VAT on purchases from abroad to be avoided.

For Swiss SMEs that sell through these platforms, the impact depends on the structure: in some cases the platform becomes the VAT taxable person, in others the obligations remain on the company. It is worth checking your specific situation with the fiduciary if you sell on a marketplace.

Broader exemptions for specific sectors

With the 2025 revision, new exclusions from VAT were introduced for certain sectors:

• Travel agencies: the resale of trips on Swiss territory is now excluded from VAT.
• Coordinated medical services: extended exemption.
• Cultural activities: broader exemption.
• Care services of non-profit organisations: excluded from VAT.
• Menstrual hygiene products: moved from the standard rate (8.1%) to the reduced rate (2.6%) from 1 January 2025.

Balance rates: more flexible from 2025

The balance-rate regime has been made more flexible: there is no longer a two-rate limit, but more than two are allowed, provided each covers at least 10% of turnover. A technical change, useful for companies with diversified activities.

The registration threshold: when the VAT obligation kicks in

A basic point not to forget: the VAT registration obligation kicks in when annual global turnover exceeds CHF 100,000, including services abroad. Below this threshold one can choose to register voluntarily (it may be worthwhile to recover input tax on purchases).

For foreign companies carrying out taxable transactions in Switzerland (installations, services to Swiss private consumers) the registration obligation kicks in regardless of the place of business.

The balance-rate method: is it worthwhile for SMEs?

For SMEs with turnover up to CHF 5.024 million and annual tax up to CHF 108,000, the balance-rate method is an interesting alternative to the effective method. How it works:

• A sectoral balance rate (assigned by the FTA based on the activity) is applied to gross turnover.
• There is no need to determine input tax on purchases.
• The result: less accounting work, fewer audits, less risk of errors.
• Drawback: if you make many purchases with VAT (investments, raw materials), the effective method may give more deduction margin.

About one third of Swiss SMEs use this method. From 2025, as mentioned, there is no longer the two-rate limit, which makes the regime more flexible for those with several types of activity.

The regime must be maintained for at least one year and requires a conscious choice: it is not always worthwhile, it depends on the structure of costs and purchases.

The VAT mistakes that cost the most

From fiduciary experience, these are the points where SMEs most often go wrong:

• Invoice without the Swiss supplier's VAT number: prevents input tax deduction. It sounds trivial, but it happens.
• Failure to register for VAT when the CHF 100,000 threshold is exceeded: the FTA recovers the unpaid tax with interest.
• Mixed expenses (personal + business) fully deducted: the VAT refund is reduced or rejected.
• Annual return instalments paid late or in insufficient amount (below 50% of the previous year's tax for the effective method, below 35% for balance rates): the annual scheme is revoked.
• Exceeding the balance-rate thresholds without informing the FTA: leads to penalties and recalculations.

The golden rule is: systematic monitoring of the requirements and thresholds, and immediate notification to the FTA when something relevant changes in turnover or activity structure.

The deadlines you cannot forget

For those managing VAT independently, the key deadlines:

• Quarterly return: within 60 days of the end of the quarter (with free extension via ePortal).
• Annual return: by 28 February of the following year; intermediate instalments on 30 May, 30 August and 30 November.
• Application for the annual scheme: by 28 February of the year for which you want to adopt it.

All operations (returns, extensions, scheme applications) are handled through the FTA ePortal.

How we help

For an SME, VAT is one of the areas where a technical mistake — even in good faith — is paid for dearly and late: the FTA recovers, calculates interest and often penalties too. Fidav handles the accounting and VAT cycle of many firms in Ticino and Switzerland, from the periodic return to the annual reconciliation, with a digital approach that reduces paper and risk.

If you are considering the move to the annual return or to the balance-rate method, we can help you understand whether it really pays off in your case — there is no one-size-fits-all answer. Read more on our accounting and financial administration and tax advisory for companies.

Have doubts about the VAT return or want to consider switching to the annual scheme? Chat with us on WhatsApp at +41 79 741 02 89 or call +41 91 640 40 20.

FAQ (visible on page + FAQPage schema above)

What are the Swiss VAT rates in 2026? In Switzerland in 2026 three VAT rates are in force: the standard rate at 8.1% (most goods and services), the reduced rate at 2.6% (food, medicines, books, newspapers, menstrual hygiene products) and the special accommodation rate at 3.8% (accommodation services with breakfast). These rates have been in force since 1 January 2024 and remain unchanged for 2026.

What is the annual VAT return for Swiss SMEs and who can access it? Since 1 January 2025, SMEs with annual turnover up to CHF 5,005,000 (VAT included) can file a single annual VAT return instead of the four quarterly ones. The application is submitted via the FTA ePortal by 28 February of the relevant year. Condition: all previous returns must have been paid on time. The main advantage is the reduction of the administrative burden.

When does the VAT obligation kick in for a business in Switzerland? In Switzerland the VAT registration obligation kicks in when annual global turnover exceeds CHF 100,000. Below this threshold one can choose to register voluntarily. Foreign companies carrying out taxable transactions in Switzerland (installations, services to private persons) must register regardless of the place of business.

What is the balance-rate method and is it worthwhile for an SME? The balance-rate method is a simplification for SMEs with turnover up to CHF 5.024 million and annual tax up to CHF 108,000: instead of calculating VAT on individual transactions, a fixed percentage is applied to gross turnover. There is no need to determine input tax, which dramatically reduces accounting work. Around one third of Swiss SMEs use it.

What are the most frequent VAT mistakes in Swiss SMEs? The most frequent mistakes are: invoices without the supplier's VAT number (prevents input tax deduction); failure to register for VAT when the CHF 100,000 threshold is exceeded; mixed expenses fully deducted; late payment of instalments in the annual return (leading to revocation of the scheme); and failure to notify the threshold being exceeded for the balance-rate method.