How to Get VAT Registered as a Freelancer in
St. Gallen

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 St. Gallen

Hey there, St. Gallen freelancers! Today we're diving into the thrilling world of Value Added Tax, better known as VAT. If you're running a freelance biz in the lovely city of St. Gallen, listen up, because this stuff is important. We'll cover what VAT is, why you should care about it, and how to get registered like a pro.

So grab a coffee, get cozy, and let's do this!

What is VAT and why do you need to register?

First off, let's break down what VAT actually is.
Basically, it's a consumption tax that's slapped onto most goods and services in Switzerland. When you buy something, that VAT is already rolled into the price. And if you're a freelancer in St. Gallen earning over 100,000 Swiss francs per year, you're legally required to register for VAT and start charging it to your clients.

But wait, there's more! Even if you're not hitting that 100K mark just yet, there are still some solid reasons to consider voluntarily registering for VAT. For one, it makes you look like a legit, professional operation in the eyes of your St. Gallen clients. It shows that you're running a real business, not just dabbling in freelancing on the side.

Plus, once you're VAT registered, you can start claiming back the VAT you pay on your business expenses.
That means all those client lunches, office supplies, and shiny new laptops? You'll get the VAT refunded on those, which is a pretty sweet deal.

Determine if you need to register

Okay, so how do you know if you actually need to register for VAT?

The key factor is your annual revenue. If your St. Gallen freelance biz is raking in over 100,000 Swiss francs per year, then congrats - you're officially required to get a VAT number and start charging that tax.
But what if you're not quite at that level? This is where it gets a bit trickier.
Technically, registering is optional if you're under the threshold, but it's still worth considering. Take a look at your revenue projections for the year ahead. Are you going to be getting close to that 100K mark? If so, it might be smart to register sooner rather than later.

Don't forget, being VAT registered isn't just about compliance - it also adds some serious credibility to your freelance game.
Clients in St. Gallen and beyond will see that you're running a professional operation, and that can open up doors to bigger and better projects. So even if you're not legally required to register yet, it's definitely worth weighing the pros and cons.

Choose your VAT filing method

Now that you've decided to take the VAT plunge, you'll need to choose a filing method.
In St. Gallen and throughout Switzerland, freelancers have three VAT options to consider

  • The Actual Method
  • The Flat Tax Rate Method
  • The Net Tax Rate Method.

With the Actual Method, you meticulously track all VAT charges to clients and payments on expenses. Come tax time, you calculate the difference. It's precise but demands diligent record-keeping.

On the flip side, there's the Flat Tax Rate Method, offering simplicity. You apply a standard VAT rate to your total revenue, tailored to your industry. It's straightforward but might not perfectly match your VAT circumstances.

Then there's the Net Tax Rate Method, offering lower rates but requiring government approval. They assess your business to determine eligibility. It's like the Flat Tax Rate Method but with potentially better rates.

The right choice hinges on your preferences and business structure. If you thrive on details and love organizing data, the Actual Method might suit you.

Prefer simplicity?
The Flat Tax Rate Method could be ideal. And if you have substantial VAT expenses and meet the criteria, the Net Tax Rate Method is worth investigating.

Gather required information

Alright, you've settled on a filing method and you're ready to make things official.
High five!
But before you can actually register for VAT, you'll need to gather up some key info about your St. Gallen freelance biz.

First up: your UID number
This is basically like an ID number for your business, and you'll need it to register for VAT. If you're running a sole proprietorship in St. Gallen, getting a UID is optional, but it's still a good idea. It shows that you're a legit business, and it can make life easier when you're dealing with clients or the government.
To get your UID, you'll need to provide some basic details about your biz, like your business name, St. Gallen address, and your own personal info. You might also need to show some proof that you're actually running a real business, like contracts or invoices.

Next up, you'll need to estimate your projected revenue for your first year of VAT registration.
This is basically an educated guess about how much money you think you'll make.
Don't stress too much about getting it exactly right - you can always adjust it later if needed. Just do your best to come up with a realistic number based on your current clients and any new biz you're hoping to land in the coming year.

Finally, make sure you've got all your personal deets handy, like your name, birthdate, and social security number.
If you're registering a company in St. Gallen rather than a sole proprietorship, you'll need to provide info for any partners or employees as well.

Register online or by mail

You've gathered all your info and you're ready to rock - nice work!
Now it's time to actually register for VAT.
In St. Gallen and across Switzerland, you can do this online or by mail, whichever floats your boat.
If you're an online kind of person, just head over to the Federal Tax Administration (FTA) website and look for the link to the VAT registration form. It's a pretty straightforward process - just fill out the form with all the info you gathered earlier, like your UID number, projected revenue, and personal details. Double-check everything for accuracy, then hit that submit button.

If you prefer the old-school paper route, no worries! Just print out the registration form from the FTA website, fill it out by hand, and pop it in the mail to the address provided.
Make sure your handwriting is nice and neat - no one wants to decipher chicken scratch when it comes to taxes.

One quick note: whether you register online or by mail, it's completely free. You won't need to shell out any cash or pay any weird hidden fees to get your VAT number. Bonus!

The registration process usually takes a few weeks from start to finish, but it can vary depending on how busy the FTA is and whether you've provided all the necessary info. If everything looks good, you'll get a shiny new VAT number in the mail. If there are any issues or questions, the FTA will reach out and let you know what additional details they need.

Await confirmation of registration

You've sent off your VAT registration for your St. Gallen freelance biz, and now the waiting game begins.
I know, patience isn't always easy when you're excited to get started, but hang in there!

So what's happening behind the scenes while you wait?
Well, your application is in the capable hands of the FTA, and they're going through all the info you provided with a fine-tooth comb. They want to make sure everything is accurate and above board before they give you the green light.
First, they'll check that you've dotted all your i's and crossed all your t's in terms of the required info. If anything is missing or unclear, they might reach out and ask for clarification or additional documents. This is why it's so key to double-check your application before sending it in.

Assuming everything looks good, the FTA will then review your supporting docs to confirm that you're running a legit business in St. Gallen. They'll take a peek at your contracts, invoices, and any other evidence you provided.

If the FTA gives you the thumbs up, congrats! You'll get an official confirmation letter in the mail with your shiny new VAT number. This is your golden ticket to the world of value-added taxes. You'll need to include this number on all your invoices and VAT returns from now on.

The whole process usually takes a few weeks, give or take. I know, it can feel like an eternity when you're chomping at the bit to get started, but trust me - it's worth the wait. Once you've got that VAT number in hand, you can start charging VAT to your St. Gallen clients and claiming it back on your business expenses. It's like a magical key that unlocks all sorts of financial perks.

Of course, there's always a chance that your registration could hit a snag. Maybe the FTA has some questions about your business activities, or they need an extra document or two. If that happens, don't panic! They'll let you know what they need, and you can work with them to get everything sorted out.

In the meantime, take a deep breath and focus on crushing it in your St. Gallen freelance game. Use this waiting period to get your ducks in a row, organize your invoicing system, and make sure you're ready to roll once that VAT number comes through.

One final tip

When you get your confirmation letter, keep that sucker somewhere safe!
You never know when you might need to reference it down the line, like if the FTA comes knocking for an audit. Having all your VAT ducks in a row will make life a whole lot easier if that day ever comes.