Increase in Swiss value added tax rates from 1 January 2024

What will change?

From 1 January 2024, the new rates of 8.1% (standard rate, previously 7.7%), 2.6% (reduced rate, previously 2.5%) and 3.8% (accommodation special rate, previously 3.7%) will apply. This increase will also lead to an adjustment of the net tax rates and the flat tax rates from 1 January 2024.

Invoicing

There are a few things to bear in mind, especially when issuing invoices. Irrespective of the invoice date, the time at which the service is provided is generally decisive for the applicable tax rate.

For periodic services that extend beyond 31 December 2023, the services must be reported and invoiced at the old tax rate on a pro rata basis until 31 December 2023 and at the new tax rate from 1 January 2024. If the services are not split up in the invoice, the entire invoice amount must be invoiced at the new tax rates and the excess tax will be owed.

Orders that have not yet been completed in the old year and are not invoiced until the new year must be invoiced at the old rates. Discounts and refunds on invoices that were issued in 2023 but will not be credited until 2024 must be settled at the old rates.

We recommend that you discuss the necessary adjustments with your IT provider as soon as possible so that you can bill your services according to the new rates timely.

Input tax and acquisition tax (reverse charge)

There are also various aspects to consider with regard to input tax and acquisition tax.

In the case of services that are subject to acquisition tax, the time of the service must be taken into account and the corresponding VAT rate must be applied before or after 1 January 2024.

In the case of input tax, the tax shown on the invoice may be deducted.

VAT declaration

In the VAT declaration for the 3rd quarter or for the 2nd semester of 2023 the new tax rates can be declared for the first time. If services are to be invoiced with the new rates before then, they will initially be declared with the old tax rates and can be corrected from the 3rd quarter or 2nd semester. If the correction is only made at the time of finalization, default interest will be charged.

If you have any questions, please contact us.

Your REWISCO team.