Overview of the Changes to the Net Tax Rate Method 2025

What changes under the net tax rate method as of January 1, 2025?

As of January 1, 2025, important adjustments to the accounting method under net tax rates (SSS) will take effect. These changes are intended to clarify VAT rules and simplify declaration practice. Companies should review the changes in good time and adjust their bookkeeping accordingly.

Key changes at a glance

More than two net tax rates possible

Companies may apply more than two net tax rates in the future if the 10% rule is met. This means that an activity must be accounted for separately using the corresponding SSS if it makes up more than 10% of taxable total turnover.

Example: A sports shop sells sporting goods (SSS 2.1%), rents them out (SSS 3.0%), and provides service work (SSS 5.3%). Previously, ancillary activities up to 50% could be accounted for at the main rate. Under the new rules, separate rates are required if the 10% threshold is exceeded.

Changes when switching the accounting method

• From the effective method to SSS: The input tax previously claimed must be corrected on the current value of existing goods and services and repaid.
• From SSS to the effective method: The input tax included in the current value may be claimed in the first VAT return after the change.
• The corrections are made via codes 415 and 410 of the VAT return.

Review of net and flat tax rates

The Swiss Federal Tax Administration (ESTV) has reviewed all existing rates and partially redefined them. These are adjusted automatically in the returns. Companies do not need to take any action.

Special procedures are abolished

The previous procedures for export supplies (Form 1050), notional input tax deduction (Form 1055), and margin taxation (Form 1056) are abolished.

Applying for additional net tax rates

If new SSS rates are required for specific activities, they can be applied for and declared directly in the VAT return. The ESTV reviews and approves them retrospectively.

Special features: abolition of the 50% rule and a new tax exemption

Mixed sectors and the 50% rule: The previous simplification for sectors carrying out multiple activities (e.g., sports shops) is abolished. Any activity accounting for more than 10% of total turnover must now be accounted for using a separate net tax rate.

Travel agencies: The net tax rate for “Travel agency: pure retailer” is abolished. Services provided by pure travel intermediaries are VAT-exempt as of 2025 and must be declared under code 230 in the return. Voluntary taxation (option) is no longer possible under SSS.

Change of accounting method by February 28, 2025

Companies wishing to adjust their accounting method must observe the following deadlines: Change from SSS to the effective method: Notify this via the ESTV contact form. Change from the effective method to SSS: Submit the declaration of subjection for the net tax rate method.

The necessary corrections must be made in the final or first VAT return before or after the change, respectively.

Conclusion

What companies should do now:

• Review the impact of the changes on your specific activities.
• Adjust your bookkeeping to correctly record the different net tax rates.
• Apply for new SSS directly in the VAT return if required.
• Clarify early the need for a change of accounting method and notify the ESTV on time.

The experts at ONE! Treuhand GmbH are happy to support you with implementing the changes. Contact us for individual advice.