The input tax deduction is one of the most important concepts in Swiss VAT — and for freelancers often the only way to get back the MWST paid on business expenses. Simply put: you reclaim the MWST you pay on invoices from suppliers and service providers from the Federal Tax Administration (ESTV). This keeps money in your till that belongs to you.

Whether you buy a laptop, subscribe to software, or purchase materials for your assignments — MWST applies everywhere. With the input tax deduction, you get exactly this amount back, provided you are MWST-liable or have voluntarily opted into the MWST system. In this guide, we explain step by step how the input tax deduction works in Switzerland, who is eligible, and what CHF amounts you typically get back.

The key points at a glance:

• Input tax = MWST you pay on business expenses — you reclaim it from the ESTV
• Requirement: MWST liability or voluntary registration (mandatory from CHF 100,000 revenue)
• Typical deductions: Laptop CHF 2,000.00 + MWST CHF 162.00, software subscription CHF 50.00/month + MWST CHF 4.05
• Input tax surplus = you get money back (when input tax > output VAT due)
• Also possible with the flat-rate tax method — but only actual input tax, not flat-rate

What is the input tax deduction?

The input tax deduction is the heart of the VAT system. The idea is simple: MWST should only be charged on the value added that you create — not on what you purchase. So you may deduct the MWST you pay when purchasing goods and services as input tax.

Two terms you need to keep apart:

• Output VAT (MWST): This is the tax you charge your customers. If you provide a service for CHF 1,000.00 and the standard rate of 8.1% applies, you invoice CHF 1,081.00. The CHF 81.00 is your output VAT, which you must pay to the ESTV.
• Input tax: This is the MWST you yourself pay on invoices from suppliers and service providers. If you purchase materials for CHF 500.00 + MWST CHF 40.50, those CHF 40.50 are your input tax.

In your MWST return, you offset the two: you only pay the difference to the ESTV. If your output VAT is higher than your input tax, you pay the difference. If your input tax is higher than your output VAT, you get money back — this is called an input tax surplus.

The legal basis for this is Art. 28 MWSTG (Value Added Tax Act). It regulates that taxable persons may deduct the MWST invoiced to them by other taxable persons as input tax in their MWST return. The current version of the law can be found on admin.ch.

Who is eligible for input tax deduction?

Not everyone can deduct input tax. This is a common misconception, especially among people who are just starting a business.

You are eligible for input tax deduction if you:

1. Are MWST-liable — this is the case when your revenue from taxable services worldwide reaches CHF 100,000.00 per year. From this threshold, you must register with the ESTV and account for MWST. An MWST registration is then mandatory.
2. Have voluntarily opted into the MWST system — if your revenue is below CHF 100,000.00, you can voluntarily register with the ESTV. This is often worthwhile for freelancers who have high investments (e.g. expensive equipment, materials) and want to recover the input tax.

Not eligible for input tax deduction are:

• Private individuals making purchases for private use
• Businesses that only provide tax-exempt services (e.g. doctors, hospitals in their core area)
• Persons who are not MWST-liable and have not voluntarily opted in

Example: Lisa is a graphic designer and has revenue of CHF 60,000.00 in her first year. She is not MWST-liable. She buys a laptop for CHF 2,000.00 + MWST CHF 162.00. Since she is not eligible for input tax deduction, the CHF 162.00 remain permanently with her. If she voluntarily opts into the MWST system, she can claim these CHF 162.00 as input tax and get them back.

However, if you opt in voluntarily, you must remain in the MWST system for at least three years — you can't simply join and leave every year. You should consider this carefully beforehand. More on this in the MWST guide for freelancers.

What can you deduct as input tax?

The basic rule is: anything you purchase for your business that shows MWST can be deducted as input tax. The key is that the expense has a business connection and you have a correct invoice showing MWST.

Typical input tax deductions for freelancers:

Important: The reduced tax rate of 2.6% applies to certain goods such as books, newspapers, food, and medical services. If you buy a specialist book for CHF 120.00, the MWST is only 2.6% — i.e. CHF 3.12, not CHF 9.72. Make sure you apply the correct rate from the invoice.

What you CANNOT deduct as input tax (Art. 29 MWSTG):

• Expenses for purely private use
• Costs of food that you consume privately
• Expenses related to tax-exempt services
• Entertainment expenses and gifts to third parties (with restrictions)

Mixed use: If you use an item partly for business and partly for private purposes — e.g. a car or a smartphone — you must split the input tax deduction. For a car, you can typically assume 70% business and 30% private use if you also drive a company car privately. You may only claim the input tax for the business portion. A clean separation is crucial here, otherwise you'll have trouble with the ESTV.

Calculating input tax: step by step

Calculating input tax is not complicated, but you need to proceed carefully. Here is the step-by-step guide.

Step 1: Collect all invoices

Keep every invoice that shows MWST. This applies to digital invoices as well as paper invoices. The invoice must contain the following mandatory details:

• Name and address of the invoicing party
• Name and address of your business
• Date of the invoice
• Quantity and type of goods/services supplied
• MWST rate and MWST amount (or indication that MWST is included)
• MWST number of the invoicing party

Step 2: Determine the net amount and MWST amount

On every invoice you will find the net amount and the MWST amount. If only a gross price is given, you need to work backwards:

• At 8.1%: net amount = gross price ÷ 1.081
• At 2.6%: net amount = gross price ÷ 1.026
• At 3.8% (accommodation): net amount = gross price ÷ 1.038

Example: You see CHF 1,081.00 gross on an invoice, MWST 8.1%. Net amount = CHF 1,081.00 ÷ 1.081 = CHF 1,000.00. MWST = CHF 81.00.

Step 3: Add up all input tax amounts

Sum up the MWST amounts of all deductible invoices in a quarter or year. This is your total input tax.

Step 4: Calculate your output VAT

Calculate the MWST you have shown on your own invoices (or that is owed under the flat-rate tax method if you use that method). For detailed help, see the guide Calculating MWST.

Step 5: Compare input tax and output VAT

• Output VAT > input tax: you pay the difference to the ESTV
• Input tax > output VAT: you get the difference back (input tax surplus)

Complete example with CHF figures:

Markus is a carpenter and has the following situation in the first quarter:

Revenue:

• Invoice Customer A: CHF 10,000.00 net + MWST 8.1% = CHF 810.00
• Invoice Customer B: CHF 5,000.00 net + MWST 8.1% = CHF 405.00
• Total output VAT: CHF 1,215.00

Expenses (with MWST):

• Wood and materials: CHF 15,000.00 net + MWST 8.1% = CHF 1,215.00
• Tools: CHF 800.00 net + MWST 8.1% = CHF 64.80
• Office supplies: CHF 200.00 net + MWST 8.1% = CHF 16.20
• Total input tax: CHF 1,296.00

Settlement:

• Output VAT: CHF 1,215.00
• Input tax: CHF 1,296.00
• Input tax surplus: CHF 1,296.00 − CHF 1,215.00 = CHF 81.00

Markus gets CHF 81.00 back from the ESTV. This is his input tax surplus — money he would otherwise have lost.

Input tax surplus: when you get money back

The input tax surplus is a term that often gives freelancers headaches. But it's easy to understand: it arises when your input tax is higher than your output VAT in a reporting period.

When does an input tax surplus arise?

Typically in the following situations:

1. Startup phase — you invest heavily in materials, equipment, and infrastructure, but have no or little revenue yet. The input tax from investments exceeds the (low) output VAT.
2. Quarter with major purchases — e.g. you buy a new machine, a laptop, or larger quantities of materials.
3. Seasonal businesses — when you buy a lot of materials in one quarter but only invoice in the next quarter.
4. Export-oriented businesses — if you deliver abroad (tax-exempt), you have little output VAT but still have input tax from domestic purchases.

What happens to the surplus?

You report the input tax surplus in your MWST return. The ESTV refunds you the amount. As a rule, the amount is transferred to your bank account when you submit the return online. You can read exactly how this works in the article Submitting MWST returns online.

Example: Sandra is a web developer and has the following figures in the first quarter of her new business:

• Investments: Laptop CHF 2,500.00 + MWST CHF 202.50, software licences CHF 1,000.00 + MWST CHF 81.00, office furniture CHF 800.00 + MWST CHF 64.80
• Total input tax: CHF 348.30
• First invoice issued: CHF 1,500.00 + MWST CHF 121.50
• Total output VAT: CHF 121.50
• Input tax surplus: CHF 348.30 − CHF 121.50 = CHF 226.80

Sandra gets CHF 226.80 back from the ESTV. This is money she urgently needs in the first quarter because she has invested a lot. That's exactly what the input tax deduction is for.

Common mistakes with the input tax deduction

In practice, we see the same mistakes over and over again. Most can be avoided with a little care.

Mistake 1: Invoices without MWST details

An invoice without a correct MWST breakdown is worthless for the input tax deduction. This often happens with small amounts or when you buy from providers who don't have an MWST number. Always check that the MWST is clearly shown on the invoice. If not: request a corrected invoice. You can read what happens if you invoice without an MWST number in the article Invoicing without MWST.

Mistake 2: Mixed use not split

You use a car, a smartphone, or an apartment partly for business, partly for private purposes. Many freelancers deduct the full input tax — this is wrong and can be expensive during an audit. Split the input tax deduction according to the business portion. For a car, for example, you can keep a logbook to prove the business portion. Without a logbook, a flat-rate estimate often applies (e.g. 70/30).

Mistake 3: Invoices too late or in the wrong quarter

The input tax must be claimed in the reporting period in which you received the invoice (invoice method) — not in the period in which you pay. If you receive an invoice in March but only pay in April, the input tax belongs in the first quarter.

Mistake 4: Deducting private expenses as input tax

Food, private clothing, gifts to friends — none of this is deductible. The ESTV checks in random samples whether expenses are genuinely business-related. Keep business expenses and private expenses cleanly separated, ideally with separate accounts.

Mistake 5: Missing MWST registration

If you are not MWST-liable and have not voluntarily opted in, you may not deduct any input tax. Nevertheless, some freelancers calculate MWST and deduct input tax — this is illegal and will be punished. Check whether you need to register before claiming input tax.

Input tax deduction and the flat-rate tax method: the special feature

The flat-rate tax method (also called the flat-rate tax rate) is a simplified accounting method for smaller businesses. Instead of listing every single invoice, you apply a flat tax rate to your revenue. This is simpler, but there is an important special feature when it comes to the input tax deduction.

How the flat-rate tax method works:

If you use the flat-rate tax method, you calculate MWST on a flat-rate basis: revenue × flat-rate tax rate = MWST owed. The flat-rate tax rate is between 0.1% and 6.0% depending on the industry. It is lower than the regular MWST rate because it already takes input tax into account on a flat-rate basis.

Input tax deduction with the flat-rate tax method — yes or no?

Here comes the important rule: if you apply the flat-rate tax method, you cannot deduct input tax — except for certain investments.

The exception: for investments and other operating costs with a capital amount (without MWST) of more than CHF 10,000.00 and input tax of more than CHF 500.00, you may still deduct the input tax. This applies, for example, to expensive machines, vehicles, or larger purchases.

Example: Sandra uses the flat-rate tax rate of 5.5% (for services). She buys a server for CHF 12,000.00 + MWST CHF 972.00. Since the capital amount is above CHF 10,000.00 and the input tax is above CHF 500.00, she may deduct the CHF 972.00 as input tax. For her monthly software subscription of CHF 50.00 + MWST CHF 4.05, she may NOT additionally deduct the input tax — it is already included in the flat-rate tax rate.

When is the flat-rate tax method worthwhile?

The flat-rate tax method is worthwhile if you have little input tax (few purchases, no major investments) and want to reduce administrative effort. If you have high input tax amounts — e.g. as a tradesperson with a lot of materials — effective accounting is usually cheaper because you get the full input tax back.

Think carefully beforehand about which method suits your business. You can change the method annually (with restrictions). A comprehensive MWST overview can be found in the MWST guide for freelancers.

Input tax deduction in practice: three examples

To make this more tangible, here are three concrete mini-stories from freelancers who use the input tax deduction in practice.

Lisa, graphic designer — the laptop purchase

Lisa works as a freelance graphic designer in Zurich. She has voluntarily opted into the MWST system because her revenue in the first year is CHF 60,000.00 — below the threshold of CHF 100,000.00. She buys a new laptop for CHF 2,000.00 net + MWST 8.1% = CHF 162.00. In her MWST return, she deducts the CHF 162.00 as input tax. Since she only issued one invoice for CHF 3,000.00 + MWST CHF 243.00 in the first quarter, she only pays CHF 81.00 to the ESTV (CHF 243.00 output VAT − CHF 162.00 input tax). Without the input tax deduction, she would have had to pay CHF 243.00. Foregoing voluntary MWST registration would have cost her CHF 162.00.

Markus, carpenter — the input tax surplus

Markus is a carpenter with his own sole proprietorship and is MWST-liable. In the winter quarter, he buys wood and materials for CHF 15,000.00 + MWST CHF 1,215.00. Plus tools for CHF 800.00 + MWST CHF 64.80. Since it's winter and he has fewer orders, he only issues invoices for CHF 5,000.00 + MWST CHF 405.00. His input tax surplus: CHF 1,279.80 (input tax) − CHF 405.00 (output VAT) = CHF 874.80. Markus gets CHF 874.80 back from the ESTV. This is money he urgently needs in the weak quarter to cover material costs.

Sandra, web developer — flat-rate tax method and input tax

Sandra is a web developer and uses the flat-rate tax rate of 5.5%. She wonders whether she can still deduct input tax. The answer: yes, but only for larger investments. She buys a server for CHF 12,000.00 + MWST CHF 972.00. Since the capital amount is above CHF 10,000.00 and the input tax is above CHF 500.00, she may claim the CHF 972.00 as input tax. Her monthly software costs of CHF 50.00 + MWST CHF 4.05 cannot be additionally deducted — they are already included in the flat-rate tax rate. Sandra does the math: the flat-rate tax method costs her CHF 990.00 (at CHF 18,000.00 revenue × 5.5%). Without the flat-rate tax method, she would owe CHF 1,458.00 at 8.1% MWST, but could deduct CHF 1,200.00 input tax — net CHF 258.00. With the flat-rate tax method, her accounting costs CHF 990.00 minus CHF 972.00 (server input tax) = CHF 18.00. For Sandra, the flat-rate tax method is clearly cheaper in this case.

FAQ: Common questions about the input tax deduction

What is the input tax deduction in simple terms?

The input tax deduction is the right to deduct the MWST you pay on business purchases from the MWST you owe the ESTV. If you have more input tax than output VAT, you get the difference back. The principle: MWST should only be charged on the value added you create — not on what you purchase.

When am I eligible for input tax deduction?

You are eligible for input tax deduction if you are MWST-liable (revenue from CHF 100,000.00) or have voluntarily opted into the MWST system. Private individuals and businesses that only generate tax-exempt services may not deduct input tax.

What can I deduct as input tax?

All expenses with a business connection and a correct MWST breakdown on the invoice: equipment, office supplies, software, travel, phone, advertising, materials, specialist books. Not deductible are private expenses, food for private consumption, and expenses related to tax-exempt services (Art. 29 MWSTG, current version on admin.ch).

How do I calculate input tax?

You sum up the MWST amounts of all deductible invoices in a reporting period. That is your total input tax. Then you calculate your output VAT (the MWST on your own invoices). The difference between input tax and output VAT results in either a payment to the ESTV or a refund. For detailed help with calculation, see the guide Calculating MWST.

What is an input tax surplus?

An input tax surplus arises when your input tax is higher than your output VAT. This often happens in the startup phase, with major investments, or in seasonal businesses. The ESTV refunds you the surplus when you submit the return online.

Can I still claim input tax in the following year?

As a rule, you must claim input tax in the reporting period in which you received the invoice. If you forget an invoice, you may be able to submit a correction. The deadline for this is usually until the final assessment of the affected period. It's best to deduct input tax immediately in the correct period — then there are no problems.

Conclusion: the input tax deduction is worthwhile for every business

The input tax deduction is not optional — it's a right you should use. Anyone who is MWST-liable or has voluntarily opted in can get back thousands of francs per year that would otherwise be lost. The key: clean invoices, correct allocation for mixed use, and timely claiming in the MWST return.

If you want to save yourself the manual collecting and calculating, use an invoicing software with MWST management that automatically records input tax and transfers it to the MWST return. Magic Heidi offers this from CHF 25.00 per month — significantly cheaper than bexio at CHF 52.00. Compare for yourself: price comparison with bexio.

The key takeaways:

• Check whether you are MWST-liable or want to voluntarily opt in
• Collect every invoice with an MWST breakdown
• Separate business and private expenses cleanly
• Report input tax in the correct reporting period
• Use software to minimise the effort

You can find more details about MWST in Switzerland in the MWST guide for freelancers and in the article Calculating MWST.