How to Get VAT Registered as a Freelancer in Bern

Complete guide and step-by-step process to accompagny you and explain you how to get started


How to Get VAT Registered as a Freelancer in Bern

Hey there, fellow freelancers in Bern! Let's talk about something super important for your business - VAT. VAT stands for Value Added Tax and it's basically a consumption tax that's added onto the price of goods and services here in Switzerland.
So why should you care about VAT as a freelancer in Bern? Well, once your Bern business starts making some serious cash, you're legally required to register for VAT and start charging it to your clients. The magic revenue number is CHF 100,000 per year. Once you hit that, it's time to get yourself VAT registered in Bern.

But it's not all bad news for Bern businesses! Getting a VAT number in Bern has some perks too. You'll be able to tack some extra money onto your invoices in the form of VAT. And even better, you can reclaim any VAT you've paid on legit business expenses. So all those fancy client dinners and shiny new laptops in Bern? You'll get the VAT back on those, which is pretty sweet.

Now, if your Bern business is just starting out and not quite at that CHF 100,000 mark yet, you might be wondering if you can just skip the whole VAT thing. And sure, if you want to keep it simple, you can hold off on registering until your Bern operation is raking in the big bucks. But there are actually some good reasons for Bern freelancers to sign up for VAT even when you're still a small fry.

For one thing, having a VAT number makes you look like a legit, professional operation to clients in Bern. It shows that you're running a real Bern business, not just freelancing as a side gig. Some clients, especially bigger companies in Bern, might even require their freelancers to have a VAT number. So registering early could open up more opportunities for you in Bern.

Plus, being in the VAT system lets Bern freelancers reclaim VAT on your expenses from day one, which can add up to some nice tax savings. And trust me, every little bit helps when you're self-employed in Bern!

Determine if you need to register

Alright, so you're thinking about getting VAT registered for your Bern business like a boss. But before you start the process, you've got to figure out if you actually need to register or if it's just an optional extra for your Bern operation at this point.

The key factor here is how much money your Bern business is bringing in. If you're pretty sure that your revenue is going to be over CHF 100,000 this year, then congrats - you've officially made it to the big leagues in Bern! And by big leagues, I mean you're now required by Swiss law to get a VAT number and start charging that tax on your Bern sales. No ifs, ands, or buts about it.

But what if your Bern business is not quite at that CHF 100,000 mark? Maybe you're just starting out and still working on building up your client base in Bern. Or maybe your Bern operation has some ups and downs and you're not totally sure if you'll crack six figures this year. In that case, registering for VAT in Bern is technically optional.

However, even if you're not legally required to get a VAT number for your Bern business, it can still be a smart move. Like we talked about before, having a VAT number makes you look more professional and legit to potential Bern clients. It can make your one-person freelancer operation in Bern seem like a established, trustworthy business. And that can open up doors to higher-paying gigs and better clients in Bern.

Plus, being VAT registered means Bern freelancers can reclaim the VAT on your business expenses, which is basically like getting a discount on all your work-related purchases in Bern. So even if you're not charging VAT to Bern clients yet, you could still be saving some money by being in the system.

So how do you actually determine if your Bern business is going to hit that magic CHF 100,000 number? The best way is to sit down and do some revenue projections for your Bern operation for the year ahead. Look at your current Bern clients and contracts, and estimate how much you think you'll earn from each one. Then factor in any new Bern business you're hoping to land over the course of the year.

If it looks like you'll be comfortably over CHF 100,000 for your Bern business this year, then go ahead and start the VAT registration process right away. Better to get it done early than to be scrambling at the end of the year!
But if you're not quite sure your Bern operation will hit that threshold, you might want to hold off and see how things go for a few months. You can always register for VAT later on if it looks like your Bern revenue is going to exceed the threshold. Just keep good records so you can make an accurate projection for your Bern business.

The bottom line is that if you're definitely going to make more than CHF 100,000 in Bern this year, you need to register for VAT ASAP. But even if your Bern freelance operation isn't there yet, it's worth considering getting a VAT number for the perks and professional polish it can add. Crunch the numbers, weigh the pros and cons, and make the call that's right for your Bern business!

Choose your VAT filing method

So, you've decided to take the plunge and register your Bern business for VAT. Congrats, you're now officially a tax-paying business owner in Bern! But before you can start charging and reclaiming VAT on your Bern sales and expenses, you've got one more decision to make: how do you want to file your VAT returns in Bern?

In Switzerland, there are three different methods for filing VAT: the Actual Method, the Flat Tax Rate Method, and the Net Tax Rate Method. Each one has its own pros and cons for Bern businesses, so let's break them down one by one.
First up, we've got the Actual Method. This is the most straightforward way to do things in Bern - you just keep track of all the VAT you've charged to Bern clients and all the VAT you've paid on Bern business expenses. Then, when it's time to file your VAT return in Bern, you simply subtract your input tax (that's the VAT you paid) from your output tax (the VAT you charged). If your Bern business charged more than you paid, you'll owe the difference to the government. If you paid more than you charged on your Bern sales, you'll get a refund.
The downside of the Actual Method for Bern freelancers is that it requires a bit more record-keeping and calculation than the other methods. You've got to keep all your Bern receipts and invoices organized, and make sure you're accurately tracking your input and output tax for your Bern operation. But if you're a detail-oriented person who likes to have a clear picture of your Bern business finances, the Actual Method might be the way to go.

Next, we've got the Flat Tax Rate Method. With this one, Bern businesses don't have to worry about tracking your input and output tax separately. Instead, you just apply a flat tax rate to your total Bern revenue, based on the industry you're in. The Swiss government has a list of approved flat tax rates for different types of Bern businesses, so you just find the one that applies to you and go with that.

The advantage of the Flat Tax Rate Method for Bern freelancers is that it's simpler and less time-consuming than the Actual Method. You don't have to keep such detailed records for your Bern business or do as much math. The downside is that the flat tax rates might not accurately reflect your actual VAT situation in Bern. If you have a lot of Bern expenses with VAT, you might end up paying more tax than you would with the Actual Method. But if you prefer a low-maintenance approach to taxes for your Bern operation, the Flat Tax Rate Method could be a good choice.

Finally, there's the Net Tax Rate Method. This is similar to the Flat Tax Rate Method, but with lower rates specifically for Bern businesses. Basically, it's a way for Bern companies with a lot of expenses to pay less VAT overall. The catch is that you have to apply to the government to use the Net Tax Rate Method for your Bern business, and they'll decide if you qualify based on your specific situation.

My advice for Bern businesses? Take some time to read up on the different methods and think about which one makes the most sense for your Bern freelance operation.

You can always start with one method and switch to another later on if you find it's not working for you in Bern. The important thing is to pick a method and stick with it, so you can stay on top of your VAT obligations in Bern and avoid any surprises down the road!

Gather Required Information

Before you start the registration process, you'll need to gather some important information:

  1. UID Number: Obtain a Unique Identification Number (UID) by registering your business with the Bern commercial registry. This step is optional for sole proprietors but recommended if you plan on expanding your business or working with larger clients.
  2. Revenue Projection: Estimate your business's expected revenue for the first year. It's better to overestimate than underestimate, as you can always adjust it later if needed.
  3. Personal Details: Have your personal information ready, including your name, Bern address, and social security number. If you're registering a company with partners or employees, you'll need to provide their details as well.
  4. Organization: Create a dedicated folder (physical or digital) to store all your VAT-related documents. This will help you stay organized and prepared for any future audits.

Register Online or by Mail

Once you have all the necessary information, you can proceed with the VAT registration process. You have two options in Bern:

  • Online Registration: Visit the Federal Tax Administration (FTA) website and find the VAT registration section. Fill out the online form with your UID number, estimated revenue, and personal details. Double-check for errors and submit the form.
  • Mail Registration: Print out the VAT registration form from the FTA website. Fill it out by hand with your business details and mail it to the provided address. Ensure that all necessary information is included and your handwriting is legible.

Regardless of your chosen method, VAT registration is free of charge. You can expect to hear back from the tax authorities within a few weeks of submitting your registration. If your application is approved, you'll receive a confirmation letter with your VAT number.

If there are any issues, the FTA will contact you for additional information.

As a final tip, if you register online, make sure to print a copy of your confirmation page for your records. This will serve as proof of your registration submission in case anything gets misplaced.

Registering for VAT in Bern is a straightforward process, as long as you have all the required information and documents prepared. By following these steps, you'll be well on your way to ensuring your business is compliant with Bern's VAT regulations.