Switzerland to introduce annual VAT reporting in 2025
Starting from January 2025, Switzerland will introduce an option for businesses with a turnover of up to CHF 5,005,000 to switch to annual VAT reporting.
This new system will provide an alternative to the current quarterly, semi-annual, or monthly reporting requirements. The change aims to simplify VAT compliance for smaller businesses while maintaining efficient tax collection.
Eligibility Criteria
To qualify for the annual VAT reporting option, businesses must meet two key criteria. First, their annual turnover must not exceed CHF 5,005,000. Secondly, the business must have a clean VAT compliance history, meaning timely VAT filings and full payments for the last three periods. The Swiss Federal Tax Administration (SFTA) will verify compliance before granting approval. Businesses that wish to opt for the annual VAT reporting system must submit an application through the ePortal by February 28, 2025. New businesses, however, have 60 days from receiving their VAT number to apply.
Advance VAT Payments
Under the new system, businesses will be required to make advance VAT payments. These payments, calculated by the SFTA, will be due in instalments on May 30, August 30, and November 30. For those using the net tax rate method, only the August 30 payment is required. These advance payments are based on an estimated tax liability and can be adjusted up to 10 days before the due date. However, if the advance payments are deemed insufficient—specifically if they are below 50% or 35% of the total tax claim—they may be considered inadequate, potentially leading to penalties.
Filing and Payment
The annual VAT statement, which will include final VAT calculations, must be submitted and paid by the end of February in the following year. Businesses will have the option to request extensions or make corrections to the submitted VAT return. If a business overpays its VAT in advance, the excess amount will be refunded after the annual reconciliation.
Revocation of the Option
If a business exceeds the CHF 5,005,000 turnover threshold or fails to meet VAT obligations on time, it will lose the right to opt for annual VAT reporting. In such cases, the business will be required to revert to the more frequent reporting periods, such as quarterly or semi-annual returns.
This shift to annual VAT reporting in Switzerland offers businesses an opportunity to streamline their VAT reporting obligations. However, careful attention to compliance and timely payments will be essential to avoid penalties and ensure smooth operation under the new system.
How can EFF help?
As the new VAT reporting system in Switzerland takes effect, businesses may find the transition challenging. EFF offers comprehensive VAT services, including VAT registration, compliance, and reporting. By choosing EFF, businesses can ensure that they meet all regulatory requirements while saving time and avoiding potential penalties. Contact us today to see ho we can help your business!
Sources:
- Federal Tax Administration VAT changes