Switzerland Tax Changes — Live Tracker

What changed

The Swiss Federal Council confirmed MWST rate increases effective 1 January 2024 following the September 2022 AHV 21 reform referendum: - Standard rate: 7.7% → 8.1% (increase of 0.4 percentage points) - Reduced rate (food, medicines, books, newspapers): 2.5% → 2.6% (increase of 0.1 percentage points) - Accommodation rate (hotels, holiday accommodation): 3.7% → 3.8% (increase of 0.1 percentage points) The increase generates approximately CHF 1.9 billion additional annual MWST revenue to fund the AHV pension reform. All businesses registered for MWST had to update their invoicing software and systems before 1 January 2024. Contracts spanning the changeover date needed to address which rate applied. The ESTV provided transitional guidance: for supplies invoiced and completed before 31 December 2023, the old rates applied even if payment was received in 2024. For supplies completed from 1 January 2024 onwards, the new rates apply. The Saldosteuersatz (flat-rate method) rates were also updated across all sectors to reflect the higher standard rate. Businesses using this method received updated sector rate tables from the ESTV.

Who it affects

• All MWST-registered businesses in Switzerland regardless of size or sector
• Businesses with contracts spanning 31 December 2023 / 1 January 2024 that needed rate transition clauses
• Software and ERP providers who had to update their Swiss tax rate configurations
• Businesses using the Saldosteuersatz method who received updated flat-rate tables

What to do

Ensure your accounting software and invoicing system reflects the current 8.1% standard rate. Verify that all invoice templates, point-of-sale systems, and online checkout processes have been updated. Check any long-term contracts entered into before 2024 to confirm they correctly address rate adjustment clauses. For historical periods, ensure you applied the correct rate for the supply date.

What changed

The OECD/G20 Pillar Two framework agreed in 2021 establishes a 15% global minimum effective tax rate. Switzerland's implementation: 1. Constitutional basis: Swiss voters approved a constitutional amendment in November 2023 (Article 129a of the Federal Constitution) enabling the Bundesrat to introduce supplementary taxes by ordinance without waiting for full parliamentary legislation. 2. Implementing ordinance: Published December 2023, effective 1 January 2024. Covers the QDMTT (Qualified Domestic Minimum Top-Up Tax) and Income Inclusion Rule (IIR). The UTPR (Undertaxed Profits Rule) applies from 2025. 3. Scope: Groups with global consolidated revenues exceeding EUR 750 million in at least two of the four preceding fiscal years. 4. GloBE effective rate test: The effective tax rate is calculated under GloBE (Global Anti-Base Erosion) rules — not identical to the standard cantonal effective rate. Swiss GloBE rates in low-tax cantons may differ from the headline cantonal rate after adjustments. 5. SBIE carve-outs: Substance-Based Income Exclusions reduce the GloBE income subject to top-up tax by 5% of eligible payroll + 5% of tangible asset carrying value. Swiss entities with genuine workforce and assets benefit significantly. 6. Revenue allocation: 75% of QDMTT revenue distributed to cantons (compensating for reduced competitiveness of low-tax cantons), 25% to the Confederation. 7. From 2025: Income Inclusion Rule (IIR) also operative — Swiss parent companies can top up on low-taxed foreign subsidiaries.

Who it affects

• Swiss entities that are part of multinational groups with global revenues exceeding EUR 750 million
• Foreign multinationals with Swiss operations whose global group revenue exceeds EUR 750 million
• Swiss entities in low-tax cantons (Zug, Nidwalden, Lucerne) where combined effective rates are below 15%
• Professional advisors to large Swiss-based multinationals

What to do

Confirm whether your group exceeds the EUR 750m revenue threshold across any two of the last four fiscal years. If yes, engage a Pillar Two specialist to perform a GloBE effective rate calculation — the rate includes GloBE-specific adjustments distinct from your standard Swiss tax return. Quantify SBIE carve-outs based on Swiss payroll and tangible asset values. Prepare for QDMTT top-up filings through the applicable cantonal authority. If your revenues are approaching EUR 750m, begin modelling 12–18 months ahead.

What changed

The Swiss parliament had approved a Verrechnungssteuer reform in March 2021. Key proposed changes: 1. Abolition of Verrechnungssteuer on domestic interest payments (bonds and money market instruments) — would have removed the 35% withholding on bond interest, making Switzerland far more attractive for issuing domestic franc bonds. 2. Switch from creditor principle to debtor principle for residual withholding tax — the tax obligation would attach to the issuer (debtor) rather than following the investor. 3. The reform was projected to cost approximately CHF 200 million in lost annual revenue while generating CHF 500 million in new business through relocated capital markets activity. The reform was put to a popular vote by the left-wing Social Democratic Party, which successfully gathered referendum signatures. On 25 September 2022, Swiss voters rejected the reform by 52.0% to 48.0%. The existing Verrechnungssteuer rules remain entirely unchanged. Consequence: Switzerland remains at a structural disadvantage versus Luxembourg and Ireland for CHF bond issuances by Swiss companies. Large Swiss corporations (ABB, Novartis, Nestlé, etc.) continue to issue bonds via foreign subsidiaries to avoid the 35% withholding issue for non-resident bondholders.

Who it affects

• Swiss companies considering bond issuances — the existing rules remain in place
• Banks and capital markets practitioners advising on Swiss franc bond structuring
• International investors holding existing Swiss bonds (no change to their position)

What to do

No action required — the existing Verrechnungssteuer rules on dividends (35%) and bond interest continue to apply unchanged. Swiss companies planning bond issuances should continue to use established offshore issuing structures if they wish to avoid the withholding tax issue for non-resident investors.

What changed

The MWSTG amendment (effective 1 January 2025) introduced deemed supplier rules for electronic interfaces: 1. Scope: Electronic platforms (marketplaces, app stores, digital intermediaries) that facilitate B2C sales of goods physically located in Switzerland to Swiss consumers are now deemed to be the supplier for MWST purposes — not the underlying seller. 2. Who is affected: Platforms facilitating sales where the actual seller is either (a) a foreign company, or (b) a domestic seller not registered for MWST. For sales by Swiss MWST-registered sellers through platforms, the seller remains liable as before. 3. Obligation: The platform must register for Swiss MWST (if not already registered), charge 8.1% MWST on the transaction, file regular MWST returns, and remit the MWST to the ESTV. 4. Excluded: Pure intermediation services (booking.com model where the platform receives a commission but the hotel charges the MWST) and B2B transactions remain outside the deemed supplier rules. 5. This builds on the existing digital services MWST rules (in force since 2019) which already required foreign digital service providers to register in Switzerland once their Swiss B2C digital services revenue reached CHF 100,000.

Who it affects

• Electronic marketplaces and platforms facilitating sales of physical goods to Swiss consumers
• App stores and digital distribution platforms operating in Switzerland
• Foreign sellers using Swiss platforms — they are relieved of MWST obligation where the platform becomes the deemed supplier
• Swiss-based platforms that previously left MWST liability entirely with their sellers

What to do

Platforms facilitating Swiss B2C goods sales should review their seller base to identify (a) unregistered Swiss sellers and (b) foreign sellers. For these categories, assess whether the platform becomes the deemed MWST supplier under the new rules. Register for Swiss MWST if not already registered. Update terms and conditions with sellers to reflect the changed MWST responsibility. Implement technical systems to charge and report Swiss MWST on applicable transactions.

What changed

The 2019 MWSTG reform introduced two key changes for foreign digital services providers: 1. Mandatory Swiss MWST registration for foreign businesses providing digital services B2C once Swiss revenue exceeds CHF 100,000 annually. Prior to 2019, foreign providers could legally supply digital services to Swiss consumers without charging Swiss MWST, creating a competitive disadvantage for Swiss providers. 2. The definition of 'digital services' is broad: it includes software downloads, streaming services (music, video, gaming), online platforms, app stores, cloud computing services provided to non-business customers, e-books, online courses and educational content, and digital advertising. Key enforcement developments since 2019: - 2019–2021: Major platforms (Netflix, Spotify, Apple, Google, Adobe, Amazon) registered voluntarily or under ESTV pressure - 2022–2023: ESTV systematically identified non-compliant foreign providers through cooperation with Swiss Customs data and credit card transaction analysis - 2024–2025: Increased enforcement activity, including demands for backdated MWST registration and penalties For B2B digital services (foreign supplier → Swiss business): the reverse charge mechanism applies. The Swiss MWST-registered business customer self-assesses the MWST on foreign digital services received and reports them in their own MWST return (both as output and input MWST if fully for taxable business use — net neutral if the supply relates entirely to taxable activities).

Who it affects

• Foreign software companies, SaaS providers, streaming services, and online platforms with Swiss consumer customers above CHF 100,000 threshold
• Swiss B2B customers receiving digital services from non-registered foreign providers (reverse charge applies)
• Swiss digital services companies who previously competed against unregistered foreign providers not charging MWST

What to do

Foreign digital services businesses: monitor Swiss B2C revenue. Once the CHF 100,000 threshold is reached or expected to be reached, apply for Swiss MWST registration via the ESTV portal. Update invoicing to include Swiss MWST at 8.1%. File quarterly or semi-annual Swiss MWST returns. Swiss B2B businesses receiving digital services from non-registered foreign suppliers: apply reverse charge — report the service as both output and input MWST in Form 100 (net neutral for fully taxable businesses, but must still be reported). Failure to apply reverse charge is an MWST compliance risk.