Yes, Switzerland has a
Value Added Tax (VAT), which is a federal consumption tax on most goods and services. The VAT system in Switzerland has three main rates as of 2024:
- Standard rate: 8.1% – This applies to most goods and services (manufactured items, electronics, consulting services, etc.). It was 7.7% but increased to 8.1% on Jan 1, 2024.
- Reduced rate: 2.6% – This lower rate applies to essential items like food, non-alcoholic beverages, books, newspapers, medicine, and some agricultural supplies. It increased slightly from 2.5% in 2024.
- Special rate for accommodation: 3.8% – This is a special rate for hotel stays and lodging (overnight with breakfast, etc.), up from 3.7%.
Certain supplies are
exempt from VAT (meaning no VAT charged, but then the supplier cannot reclaim input VAT on costs). Notable exemptions include healthcare services, education, leasing of residential real estate, insurance and financial services (most banking transactions), and exports (exports are zero-rated, not exempt, meaning you charge 0% but can reclaim input VAT).
Businesses must
register for VAT if their global turnover exceeds CHF 100,000 per year. Once registered, they must charge VAT on their Swiss taxable sales and file periodic VAT returns (usually quarterly). On the returns, they can
recover input VAT on business expenses, so the VAT is ultimately a pass-through tax.
For example, if your company sells a product for CHF 1,000 + VAT, you’d charge CHF 1,081 (at 8.1% VAT) to a Swiss customer, then later remit CHF 81 to the tax authorities, minus any VAT you paid on inputs. If selling to abroad, you wouldn’t charge Swiss VAT (exports at 0%). If buying from abroad, you’d pay import VAT to customs (8.1%) which you can claim back.
Switzerland’s VAT rate is notably low (8.1% vs 20% in many EU countries). This low VAT is part of why consumer prices, while high pre-tax, don’t get an extra big tax on top. The VAT was raised in 2024 to fund social programs, but still remains low.
Foreign companies selling into Switzerland sometimes need to register too – e.g., if you are a foreign software company with no Swiss office but you sell >100k CHF of software to Swiss clients (B2C or B2B), you may need a Swiss VAT number and charge Swiss VAT on those sales.
In summary,
VAT in Switzerland is a single nationwide tax at 8.1% (standard). Companies should be aware of their obligation to register and charge VAT. It’s separate from income tax – it goes to a different division (the Federal Tax Administration’s VAT department). As a consumption tax, the burden is on end consumers; business-to-business transactions are usually just a flow-through. The law governing VAT is the MWSTG (Mehrwertsteuergesetz), and it aligns largely with EU VAT principles.