What is MWST / TVA (Mehrwertsteuer)?
MWST (Mehrwertsteuer in German, TVA in French, IVA in Italian) is Switzerland's value added tax. The standard rate is 8.1%, with a reduced rate of 2.6% for food, books, newspapers, medicines and certain agricultural goods, and a special rate of 3.8% for accommodation services. VAT registration is mandatory for businesses with annual turnover exceeding CHF 100,000.
Current Rate (2025)
Standard: 8.1%. Reduced: 2.6%. Accommodation: 3.8%. Registration threshold: CHF 100,000 annual turnover.
Example
A Zurich-based software consultancy with CHF 250,000 annual revenue charges 8.1% MWST on invoices (CHF 20,250), deducts input MWST on business costs, and remits the net difference to the ESTV quarterly.
How MWST / TVA (Mehrwertsteuer) works in Switzerland
MWST is administered by the Swiss Federal Tax Administration (ESTV/AFC) and is governed by the Swiss VAT Act (MWSTG, Mehrwertsteuergesetz). Despite Switzerland not being an EU member, its VAT system is broadly similar to the EU VAT Directive in structure.\n\n**Rate structure from 1 January 2024**\nThe current rates reflect the January 2024 increase (from 7.7%, 2.5%, and 3.7% respectively) to fund the AHV pension system:\n- Standard rate: 8.1% — applies to most goods and services\n- Reduced rate: 2.6% — food, non-alcoholic beverages, medicines, books, newspapers, magazines, agricultural products\n- Accommodation rate: 3.8% — hotel stays and similar accommodation\n\n**Registration threshold**\nBusinesses with annual taxable turnover exceeding CHF 100,000 worldwide must register for MWST in Switzerland. This is a low threshold by European standards. Voluntary registration is possible below CHF 100,000 if the business regularly has more input tax than output tax (net tax position).\n\n**Filing and payment**\nMost businesses file quarterly MWST returns. Annual filing is available for businesses with turnover below CHF 5,000,000 and a net tax liability below CHF 1,000. The ESTV operates an online portal (estv.admin.ch) for filings. Payment is due 60 days after the end of the tax period.\n\n**Flat-rate method (Saldosteuersatz)**\nSmall businesses with annual taxable turnover under CHF 5,000,000 and annual MWST liability under CHF 100,000 can apply for the flat-rate (Saldosteuersatz) method. Instead of tracking individual input and output MWST, they apply a sector-specific flat rate to gross revenue. This dramatically simplifies bookkeeping. Rates vary by industry and are published by the ESTV.\n\n**Import MWST**\nGoods imported into Switzerland are subject to import MWST collected by Swiss Customs (BAZG). Services imported from abroad (B2B) are subject to the reverse charge mechanism — the Swiss recipient self-assesses and reports the MWST.\n\n**Digital services**\nForeign businesses supplying digital services (software, streaming, downloads) to Swiss private consumers must register for MWST once their Swiss revenue exceeds CHF 100,000. This rule aligns Switzerland with global digital services VAT trends.
Related terms
Quellensteuer is Switzerland's withholding tax on employment income paid to foreign nationals who do not hold a C permit (permanent residence) or are not Swiss citizens. It is withheld by the employer from salary at source, at cantonal-specific rates, replacing the normal self-assessment income tax obligation for the affected employee.
Gewinnsteuer is Switzerland's corporate profit tax. At the federal level, the direct federal tax (direkte Bundessteuer) is levied at a flat rate of 8.5% on profit after tax, which equates to an effective rate of approximately 7.83% on pre-tax profit. Cantons levy their own Gewinnsteuer on top, meaning the combined federal and cantonal effective rate varies by canton.
A GmbH (Société à responsabilité limitée / Società a responsabilità limitata) is Switzerland's most common private limited company form. It requires a minimum share capital of CHF 20,000, all of which must be paid up on formation. Liability is limited to the company's assets. It is governed by the Swiss Code of Obligations (OR/CO), Articles 772–827.
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