VAT rates for 2025 in Switzerland

We’ve got some essential VAT updates you should know about for the upcoming years. Let’s break it down, so you’re all set when you invoice your customers or tally your books for taxation.

Swiss VAT Rates Update: Key Changes Effective from 2025

As of 2025, Switzerland has implemented a revised Value Added Tax (VAT) structure. These updates stem from the September 25, 2022 vote on the AHV (Old Age and Survivors’ Insurance) reform, which aimed to reinforce the country's social security system. The changes took effect on January 1, 2024, and continue to apply in 2025.

Current Swiss VAT Rates (2025 and Beyond)

With the revised structure now in effect, businesses and consumers should take note of the following 2025 VAT rates:

Standard VAT Rate: 8.1% (previously 7.7%)
Reduced VAT Rate: 2.6%, covering essential goods and services such as food, books, and pharmaceuticals
Special VAT Rate for Accommodation: 3.8%, applicable to hotel stays and similar lodging services

These adjustments remain in place in 2025, ensuring financial stability for Switzerland’s social security system while aligning VAT contributions with economic demands.

Swiss VAT Rates from 2018 to 2023

For reference, the VAT structure in Switzerland before the 2024 adjustment was:

Standard VAT Rate: 7.7%
Reduced VAT Rate: 2.5%
Special VAT Rate for Accommodation: 3.7%

These rates were effective from January 1, 2018, to December 31, 2023. The increase in 2025 follows a strategic financial plan to support national pension funding and maintain Switzerland’s economic stability.

Impact on Businesses and Consumers in 2025

As we progress through 2025, businesses must ensure compliance with the updated VAT rates by adjusting accounting systems, invoices, pricing models, and financial forecasts. Consumers may also notice slight price increases on taxable goods and services due to the rate changes.

For the latest information on Swiss VAT regulations, exemptions, and compliance requirements, visit the Swiss Federal Tax Administration (FTA) website.

By staying informed about these VAT changes in 2025, businesses and individuals can ensure they remain compliant with Swiss tax laws while adapting to the evolving economic landscape.

When to Charge VAT

Charge Swiss VAT when:

You're registered for Swiss VAT
The supply is taxable in Switzerland
The supply is not exempt or zero-rated

The place of supply rules determine whether a transaction is taxable in Switzerland.

VAT Exemptions and Special Cases

Certain supplies are exempt from VAT or zero-rated, including:

Export of goods
Certain cross-border services
Financial services
Healthcare and education services

Always clearly indicate on the invoice if a supply is exempt or zero-rated, citing the relevant legal basis if possible.

VAT – What’s All the Fuss About?

VAT, or Value Added Tax, is essentially the tax on the value added to goods and services. It’s like a relay race where each participant adds a little something to the baton (the product) before handing it off. The baton gets more valuable as it goes along, and a little tax is added each time it changes hands. The end consumer ends up with the baton and the final price tag, including VAT. This system ensures governments get their share to fund public services, without putting all the burden on one link in the chain.

Switzerland introduced VAT back in the 90's to harmonize with European standards and since then, it’s been an important piece of the Swiss financial puzzle. It's administered by the Federal Tax Administration (FTA) and serves as a significant source of revenue helping fund everything from roads to education.

For you, the self-employed, understanding VAT is super important, both for managing your pricing and keeping on the right side of tax laws. Whether you're selling services, creating exquisite handcrafted watches, or coding the next hit app, VAT affects your pricing and competitive edge in the market.

By keeping up-to-date with changes, you can plan ahead, price your products or services correctly, and ensure you're contributing to the welfare of the beautiful Swiss homeland without any unexpected hiccups come tax time.

Remember, this page is your friend, keeping you in the know-how so that you can continue building your business and serving your customers with confidence and compliance!