Swiss VAT Reforms 2024 till 2028:

Swiss VAT is undergoing a phase of profound structural and quantitative transformation. Driven by socio-political decisions—particularly securing old-age and survivors’ insurance (AHV)—and by the need to adapt the tax system to the requirements of a digitised and internationally networked economy, extensive legislative changes have been initiated.

The focus is not only on the VAT rate increase effective 1 January 2024, but also on the partial revision of the VAT Act (MWSTG) that entered into force on 1 January 2025, which is sustainably reshaping the administrative landscape for businesses.

Swiss VAT reforms 2024–2028: Overview

Swiss value added tax (VAT) is undergoing a phase of profound structural and quantitative transformation. Driven by socio-political decisions—particularly securing old-age and survivors’ insurance (AHV)—and by the need to adapt the tax system to the requirements of a digitised and internationally networked economy, extensive legislative changes have been initiated.

The focus is not only on the increase in VAT rates as of 1 January 2024, but also on the partial revision of the VAT Act (MWSTG) that entered into force on 1 January 2025, which sustainably reshapes the administrative landscape for businesses.

This analysis examines the mechanisms of this transition, verifies the correct implementation of the new legal requirements, and highlights the strategic implications for taxable persons in Switzerland.

Particular attention is paid to the time allocation of supplies, the redesign of accounting methods, and the advancing digitisation of reporting through 2028.

The VAT rate increase as of 1 January 2024: Verification and legal basis

The increase in VAT rates effective 1 January 2024 is the direct consequence of the popular vote of 25 September 2022. With the approval of the “AHV 21” reform, the Swiss electorate agreed to additional financing for AHV via an increase in VAT rates to stabilise pension financing until 2030.

This measure marks a turning point, as the rates—after a phase of reductions in 2018—were increased again to a level last reached in 2011.

Quantitative verification of the new VAT rates

The review of the data provided by the user confirms its correctness in accordance with the official publications of the Swiss Federal Tax Administration (FTA). The adjustment affects all three rate categories of the Swiss VAT system.

The standard rate applies to the majority of taxable supplies, including clothing, electronic devices, vehicles, and services in consulting and hospitality. The reduced rate of 2.6% protects goods for daily needs, such as food, mains water, medicines, as well as newspapers and books.

The special rate of 3.8% remains specific to accommodation services (overnight stay including breakfast) in order to support the competitiveness of the Swiss tourism sector.

The principle of supply/performance under Art. 115 MWSTG as a central doctrine

The analysis of the information provided on the temporal application of VAT rates highlights the central importance of Article 115 MWSTG. It can be stated that only the time of supply/performance determines which VAT rate applies. Neither the invoice date nor the payment or posting date is relevant for determining the applicable rate.

This legal requirement implies that supplies completed physically or temporally by 31 December 2023 must be invoiced at the old VAT rate (e.g., 7.7%), even if invoicing takes place only in February 2024. Conversely, advance payments made in 2023 for supplies in 2024 must be declared at the new rate (e.g., 8.1%).

Analysis of the case examples and methodological correctness

The examples mentioned in the user text regarding acquisition tax illustrate the complexity of pro rata accounting for cross-period supplies. The acquisition tax obligation (reverse-charge procedure) particularly affects the procurement of services from companies domiciled abroad by domestic taxable persons.

Verification of example 1: Licence fees

In the first example, a licence fee of CHF 5,000 is invoiced for the period from 1 September 2023 to 31 August 2024. The allocation is made on a time basis over 12 months.

• Period 2023: 4 months (September to December).
• Period 2024: 8 months (January to August).

The calculation check yields for 2023: (CHF 5,000/12)×4=CHF 1,666.67. At a rate of 7.7%, this results in VAT of CHF 128.33. The user text states CHF 128.35, which indicates rounding differences but confirms the methodological correctness of the allocation.

For 2024, the result is: (CHF 5,000/12)×8=CHF 3,333.33. At 8.1%, this results in VAT of CHF 270.00. The methodological recommendation to record such supplies correctly already in the return for Q3 2023 is consistent with FTA practice.

Verification of example 2: Unclear evidence

The second example addresses the consequences of insufficient supply allocation. It clarifies that the FTA, in cases of unclear facts or missing evidence, always requires application of the higher and/or newer VAT rate.

If a company provides a service from 1 July 2023 to 29 February 2024 and does not allocate it on the invoice, the entire amount must be taxed at 8.1%.

This underscores the need for companies to manage their invoicing processes precisely to avoid unnecessary additional burdens.

Strategic adjustments and operational measures

The transition to new VAT rates requires far more than a system-side adjustment of master data. The analysis of the necessary measures shows that a holistic view of business processes is essential.

Adjustment of invoice templates and terms and conditions

Companies must ensure that their invoicing systems are able to show both VAT rates on the same document during the transition phase. This is particularly relevant for final invoices for projects that started in 2023 and were completed in 2024.

In addition, general terms and conditions (AGB) and price lists should be checked to see whether they specify explicit VAT rates or merely refer to the “legally applicable VAT”. Contracts with fixed gross prices can lead to a margin reduction in the event of a VAT rate increase if no adjustment clauses exist.

Training and information

Raising awareness among employees in purchasing, sales, and accounting is crucial. Errors in recording the supply date in accounts payable can lead to an unlawful input tax reduction or additional assessments. Particular caution is required for expense claims: hotel invoices often show different rates for lodging (3.8%) and breakfast or parking fees (8.1%). A flat input tax reduction without splitting the receipt leads to errors in the VAT return.

The partial revision of the VAT Act 2025: A new era of taxation

While the VAT rate increase in 2024 primarily represented a fiscal adjustment, the partial revision of the VAT Act effective 1 January 2025 brings profound systemic changes. This revision aims to increase tax fairness, reduce the administrative burden for SMEs, and adapt the law to the realities of digital trade.

The introduction of platform taxation (Art. 20a MWSTG)

A key element of the 2025 revision is the introduction of VAT liability for electronic platforms. Previously, foreign mail-order sellers could often deliver small consignments (import tax amount under CHF 5) to Switzerland tax-free if they did not reach the turnover threshold of CHF 100,000. This created competitive advantages over domestic trade.

From 2025, operators of electronic platforms that enable the sale of goods are treated as suppliers.

A supply-chain fiction is created:

• The actual seller supplies to the platform (this supply is VAT-exempt under certain conditions).
• The platform supplies to the end customer and charges Swiss VAT.

This rule applies to both domestic and foreign platforms. Platforms must register for VAT if they achieve turnover of at least CHF 100,000 per year with small consignments. Exempt from this rule are platforms that only process payments, place advertising, or merely refer customers without being involved in the ordering process.

Reform of the flat-rate tax methods

Accounting under flat tax rates (SSS) is fundamentally re-regulated from 2025 in order to minimise tax optimisation and competitive distortions. The previous practice of often bundling activities under a single rate is replaced by a more detailed assessment.

10% threshold: For each activity that accounts for more than 10% of taxable total turnover, a separate flat tax rate is now approved. This means that companies may need to apply multiple rates (theoretically up to nine) in a single filing period if they operate in different sectors.

Abolition of special rules: Previous simplifications such as the mixed-sector rule or special deductions for exports for SSS users are abolished.

Method change: A change from effective accounting to the SSS method leads from 2025 to a correction of input tax deduction based on the current value of existing goods and services. Conversely, when switching to the effective method, a “Einlageentsteuerung” can be performed.

The limits for applying the SSS method were slightly adjusted. For 2025/2026, the turnover limit is CHF 5,024,000 (incl. VAT) and the maximum annual tax liability is CHF 108,000. Foreign companies are explicitly excluded from applying the SSS method from 2025.

Annual filing as a simplification for SMEs

A significant administrative simplification for companies with stable turnover is the introduction of annual VAT filing from 1 January 2025.

Requirement: Taxable annual turnover must not exceed CHF 5,005,000.

Application deadline: Companies that wanted to use this method for 2025 had to submit the application by 28 February 2025 via the ePortal.

Instalments: To secure tax revenue, the FTA sets interim instalment payments. Under the effective method, these are three instalments (May, August, November); under the SSS method, one instalment (August). The instalments are based on the prior year’s tax liability.

This option reduces the workload of preparing periodic returns during the year, but requires careful liquidity planning, as instalments are due even when turnover fluctuates.

Sector impacts and specific changes

The 2025 revision specifically addresses industries and topics where there were previously uncertainties or where social and ecological goals are pursued.

Healthcare and Spitex services

To dampen costs in healthcare and promote equal treatment, the VAT exemptions in Art. 21 MWSTG were expanded.

Spitex: From 2025, home-provided nursing, care, and household services of all Spitex organisations are VAT-exempt, regardless of whether they are non-profit or for-profit. Companies that exclusively offer household help remain taxable.

Medical treatments: Services of coordinated care related to medical treatments are now explicitly VAT-exempt. In addition, the provision of infrastructure to attending physicians in outpatient centres and day clinics is now also VAT-exempt.

Education and e-learning

From 2025, the recipient-location principle applies to interactive distance-learning courses. This means that educational services provided by Swiss suppliers to persons abroad are no longer subject to Swiss VAT.

Travel agencies and tourism

Travel services provided in one’s own name that are performed abroad are now VAT-exempt. Foreign travel agencies no longer need to register for their services in Switzerland. In return, domestic travel agencies lose the input tax deduction for services purchased domestically.

Ecological steering and emission rights

Trading in emission rights, certificates, and guarantees of origin for electricity is generally subject to acquisition tax (reverse charge) from 2025, even if both seller and buyer are domiciled in Switzerland.

Digital transformation: ePortal, AGOV and the end of paper filing

The FTA is driving the digitisation of the entire reporting and filing process. Companies must prepare for fundamental changes in the technical infrastructure.

Portal obligation and the shutdown of “MWST-Abrechnung easy”

A general portal obligation for VAT submissions has been in place since 1 January 2024. A final transition period for paper returns ended on 31 December 2024.

A key milestone in 2026 is the discontinuation of the “MWST-Abrechnung easy” service as of May 2026. Going forward, the FTA will rely exclusively on the “MWST-Abrechnung pro” service.

Introduction of AGOV as the new login standard

Access to the FTA ePortal will become more secure and standardised. The previous CH-Login will be replaced by the new identity system AGOV.

• Timeline: From 31 October 2026, registration and login via AGOV will be mandatory.
• Procedure: Users should already switch to AGOV now. Existing CH-Logins will be automatically migrated during the process.
• Final end: The CH-Login option will be fully discontinued at the end of 2027.

Financial compliance: interest rates and finalisation

The interest rate for late-payment interest is set annually by the Federal Department of Finance (FDF).

Late-payment interest is due without reminder if the tax payment is made later than 60 days after the end of the filing period. The de minimis threshold of CHF 100 ensures that very small amounts are not invoiced.

To avoid interest when extensions are granted, the FTA strongly recommends making advance payments.

The finalisation deadline and its legal consequences

• Deadline: 240 days after the end of the financial year. For companies with a year-end of 31 December, the deadline is 31 August of the following year.
• Content: Reconciliation of booked turnover and input taxes with the declared values. Differences must be corrected using Form 550.
• Options: After expiry of the finalisation deadline, it is no longer legally possible to exercise or revoke an option for taxing exempt supplies retroactively.

Outlook 2026–2028: Further VAT increases on the horizon

The adoption of the popular initiative for a 13th AHV pension in March 2024 creates a new financing need, which is expected to be covered again via VAT.

The planned increase in 2028

The Federal Council is planning another VAT rate increase of approximately 0.7 percentage points as of 1 January 2028. As this requires a constitutional amendment, another popular vote is expected no later than 2027.

In addition, it is planned to extend the special rate for accommodation services until 31 December 2035.

Strategic recommendations and summary

The analysis of the current and future Swiss VAT landscape shows that companies must view tax compliance as an ongoing process.

Key priorities for companies

Systemic precision: Time allocation under the principle of supply/performance (Art. 115 MWSTG) must be strictly observed. Invoices for cross-period supplies must be allocated pro rata.

Platform strategy: Companies selling products via electronic marketplaces or operating such platforms must reassess their tax position in light of the new supply-chain fiction from 2025.

Method choice: The re-regulation of the flat tax rate method (10% threshold) increases complexity.

Digital readiness: The transition to AGOV and exclusive use of “MWST-Abrechnung pro” from 2026 require early adjustment of internal processes and access rights.

Liquidity management: Given the planned further increases up to 2028 and current late-payment interest rates, precise cash-flow management for tax payments is essential.