VAT (MWST/TVA) — 8.1% / 3.8% / 2.6%
Swiss VAT (Mehrwertsteuer in German, taxe sur la valeur ajoutée in French, imposta sul valore aggiunto in Italian) is among the lowest in the world. For the newcomer: where the EU applies an average standard rate around 21%, Switzerland charges 8.1%. That rate was raised from 7.7% to 8.1% on 1 January 2024 to fund the 13th AHV/AVS pension.
History — from the 1995 turnover tax to the 2024 AHV hike
Switzerland introduced VAT in 1995, replacing the old turnover tax (IChA / WUST). The standard rate started at 6.5% then followed an upward path tied to social-insurance funding: 7.5% (1999, AHV/DI), 8.0% (2011, temporary DI), back to 7.7% (2018), then 8.1% on 1 January 2024.
This latest rise stems from the AHV 21 popular vote of 25 September 2022, which funds the stabilisation of the 1st pillar (old-age provision). The direct link between the VAT rate and pension funding is a Swiss institutional particularity.
1995 | Introduction of VAT (MWST/TVA), replacing the WUST/IChA turnover
| tax. Initial standard rate 6.5%.
|
1999 | Rise to 7.5% to fund the AHV/AVS and DI schemes.
|
2011 | Standard rate raised to 8.0% (temporary DI funding).
|
2018 | Cut to 7.7% (end of temporary DI funding, FABI rail rise
| offset). Reduced 2.5%, accommodation 3.7%.
|
1 Jan 2024 | Rise to 8.1% (standard), 2.6% (reduced), 3.8% (accommodation)
| — AHV 21 popular vote of 25 Sep 2022, to fund the 13th AHV/AVS
| pension and stabilise the 1st pillar.
|
2025-2026 | Rates stable. Quarterly return (effective method) or
| half-yearly (net tax debt rate, NTDR).Governance — FTA/ESTV and MWSTG/VAT Act
VAT is run by the Federal Tax Administration (FTA) — Eidgenössische Steuerverwaltung (ESTV) in German. The legal basis is the VAT Act (MWSTG / LTVA) and its ordinance (MWSTV / OTVA). The taxable person self-assesses VAT, via a quarterly return (effective method) or a half-yearly return (net tax debt rate, NTDR, for small businesses).
Schema — the three rates and the breakdown
A Swiss invoice must break VAT down by applicable rate. The VAT number (UID + MWST suffix) and the mention of rates are mandatory elements:
Swiss invoice — VAT breakdown (example)
Item Net amount Rate VAT
--------------------------- ----------- ------- --------
Consulting (services) 1,200.00 8.1% 97.20
Printed manual (book) 45.00 2.6% 1.17
Hotel night (accommodation) 180.00 3.8% 6.84
Export outside CH (to EU) 500.00 0.0% 0.00 (zero-rated)
--------------------------- ----------- ------- --------
Total net 1,925.00
Total VAT 105.21
Total gross 2,030.21
Supplier VAT no.: CHE-123.456.789 MWST
(= UID CHE-123.456.789 + MWST suffix)Switzerland vs EU — the lowest VAT
| Country | Standard rate | Reduced | Specific |
|---|---|---|---|
| Switzerland | 8.1% | 2.6% | 3.8% accommodation |
| Germany | 19% | 7% | — |
| France | 20% | 10% / 5.5% / 2.1% | — |
| Italy | 22% | 10% / 5% / 4% | — |
| Hungary | 27% | 18% / 5% | highest in the EU |
Liability, threshold, return
- Threshold: mandatory liability from CHF 100,000 of worldwide turnover (CHF 150,000 for sports/cultural associations and non-profit institutions).
- Return: quarterly (effective method) or half-yearly (NTDR — a simplified flat-rate scheme for small entities).
- VAT number: each taxable person receives their UID/IDE with an MWST/TVA/IVA suffix depending on language.
- Acquisition of services: reverse charge (acquisition tax) on services bought from abroad.
Common pitfalls
- Using the old 7.7% rate. Any invoice dated after 1 January 2024 must apply 8.1% (and 2.6 / 3.8%). Systems not updated produce wrong returns.
- Forgetting the MWST suffix. The VAT number is not the UID alone: it is UID + MWST/TVA/IVA suffix. The UID alone does not prove VAT liability.
- Confusing reduced and accommodation rates. 2.6% (basic goods) ≠ 3.8% (hotel nights). Charging a night at 2.6% is an error.
- Charging VAT on an export. Exports outside Switzerland are zero-rated; charging 8.1% to an EU customer is a common mistake. See the outside-EU / ViDA page.