Methods and Forms of Reporting for VAT Returns
La TVA se calcule par période fiscale correspondant en général à une année civile. Au cours de chaque période fiscale, vous devez procéder au décompte de l’impôt.
VAT is calculated per tax period, which generally corresponds to one calendar year. During each tax period, you must complete a tax return.
You have the choice between two reporting methods for VAT returns:
- The effective method
- The net tax rate (TDFN) and flat rate method (TAF). Depending on the form of reporting selected, returns must be completed either every three or every six months.
VAT Return: Which reporting method to choose?
This reporting method enables you to declare goods and services relating to the return period whilst deducting the tax amount preliminarily paid to your suppliers during this period. You must complete this form of return every three months along with the payment of tax due.
Net tax rate and flat rate method:
With this simplified assessment method, it is not necessary to calculate input tax. It is sufficient to multiply the annual turnover of your company (including VAT received) by the net tax rate issued by the FTA. This rate is adapted to each sector of activity and takes into account the preliminarily deductible tax amount on a flat rate basis (details of rates per sector and activity are available via the FTA website: https://www.newsd.admin.ch/newsd/message/attachments/49771.pdf )
To qualify for this reporting method, your company must meet the following conditions:
- The annual turnover does not exceed CHF 5,005,000.00 of taxable supplies
- The annual tax due does not exceed CHF 103,000.00 for the same period
If you choose this reporting method, your VAT return must be completed every six months.
It is essential to make your decision based on your company’s activity type, as in certain cases the effective method will prove more advantageous.
Within the context of a partial revision of the VAT Act, the rates for the net tax rate method have changed as of 1st January 2018:
|Rates until 31.12.2017||Rates as of 01.01.2018|
As well as the reporting method, you must also choose your form of reporting.
Flat rate reporting method: particularity for public authorities
This reporting method is reserved for public authorities and associated services, such as schools, hospitals, associations and foundations.
The change from the net tax rate reporting method to the effective reporting method can be made every year. In contrast, three years must pass before a change can be made from the effective method to the net tax rate method.
The change from the flat rate method to the effective method may take place after three years, while the change from the effective reporting method to the flat rate method may only take place after ten years.
A change request must be submitted in writing to the Swiss Federal Tax Administration no later than 60 days after the beginning of the tax period.
For further information regarding the VAT applied to public authorities, see our ‘VAT and public authorities’ page.
Forms of reporting: what are the differences?
There are two forms of VAT reporting: reporting based on agreed consideration and reporting based on consideration collected. It should be noted that the form of reporting that you choose must be retained for at least the tax period in progress.
- Reporting based on agreed consideration: if you opt for this form of reporting, you must deduct VAT at the time of invoicing your clients. Equally, you must pay VAT when your invoices are issued and deduct VAT when invoicing your clients. VAT is to be paid during the period in which the invoice is issued, even if payment of this invoice is not received until a later date.
- Reporting based on consideration collected: with this form of reporting, VAT is due when you receive payment for your client invoices. You must deduct VAT at the time of actual payment of the invoice. It should be noted that this form of reporting is subject to an authorisation request from the Swiss Federal Tax Administration.
You may modify your form of VAT reporting at the end of a tax period subject to the conditions listed in Articles 106 and 107 of the Ordinance on Value Added Tax (https://www.admin.ch/opc/en/classified-compilation/20091866/index.html).
If you would like to find out more about which method and form of reporting is best suited to your company, our tax advisors, specialised in VAT liability, will be happy to examine your file and provide you with recommendations where necessary. Contact us on 022 906 11 77, or by email: firstname.lastname@example.org