On September 25, 2022, the Swiss people were asked to vote on the reform to stabilize the AVS system. One of the measures of this reform was to increase VAT rates on January 1st, 2024.
Since the Swiss people have accepted this reform, the new rates will apply from January 1st 2024. What does this mean for your company?
VAT rates
| Applicable rates
until 31.12.2023 |
Applicable rates
from 01.01.2024 |
|
| Standard rate | 7.7% | 8.1% |
| Reduced rate | 2.5% | 2.6% |
| Spcial rate (accomodation) | 3.7% | 3.8% |
Which rate should I apply to my invoice?
You might think that the date of the invoice or the date of payment would be decisive in determining the correct VAT rate, but the VAT is determined by the date or the period the service is supplied.
This date is not always easy to determine, especially when the contract extends over several years.
In such cases, the invoice should be detailed with the application of the old rate for services provided up to 12.31.2023 and the new rate for services provided from 01.01.2024.
The following examples illustrate the correct application of VAT rates.
Example 1
On November 27, 2023, Maison du meuble SA (invoicing according to services received and according to the actual invoicing method) concludes a contract with a customer for the delivery of a wardrobe. The wardrobe is delivered to the customer’s home on December 22, 2023. The invoice is issued on January 12, 2024. The customer pays the invoice one week later. The decisive date for determining whether the old or new rate applies is the date of delivery, i.e. December 22, 2023. Consequently, Maison du meuble SA must invoice the service at 7.7% and declare it in the VAT statement for the 1st quarter of 2024.
Example 2
The interior design firm Déco SA (billing according to agreed consideration and the actual billing method) carries out interior design work for a customer from December 11, 2023 to January 30, 2024. The invoice, for a total of CHF 35,000, was issued on February 15, 2024 and paid by the customer on April 5, 2024. Work performed up to December 31, 2023, amounting to CHF 20,000 (incl. 7.7% VAT), and work performed from January 1, 2024, amounting to CHF 15,000 (incl. 8.1% VAT), must be listed separately on the invoice. Services invoiced on February 15, 2024 and the tax due on these services must be declared in the VAT statement for the 1st quarter of 2024.
Net tax liability rates
The increase in statutory rates also entails a corresponding adjustment in net tax liability rates.
| Net tax rates until December 31, 2023 |
Net tax rates from January 1, 2024 |
| 0.1% | 0.1% |
| 0.6% | 0.6% |
| 1.2% | 1.3% |
| 2.0% | 2.1% |
| 2.8% | 3.0% |
| 3.5% | 3.7% |
| 4.3% | 4.5% |
| 5.1% | 5.3% |
| 5.9% | 6.2% |
| 6.5% | 6.8% |
