Switzerland Introduces Annual Reporting Period in 2025

Switzerland introduces the annual VAT reporting frequency effective by January 2025.

New Annual Reporting Period in Switzerland

Switzerland introduces the annual VAT reporting frequency effective by January 2025. This change offers greater flexibility and efficiency for businesses, particularly small and medium-sized enterprises (SMEs).

Currently, the reporting periods available are quarterly, bi-annual (every six months), and monthly, with corresponding payment and refund schedules. However, with the upcoming partial revision of Swiss VAT law, companies will have the option to file VAT returns annually, potentially reducing their reporting frequency and administrative burden.

Effective January 2025, the following frequency of filing rules for VAT compliance will apply:

  • The standard reporting period is the quarter.
  • In the case of taxpayers in special net tax rates scheme, the reporting period is bi-annual.
  • In the case of taxpayers usually in a refund position, the tax period can be changed to the month.
  • In the case of taxpayers with low turnover, the tax period can be changed to annual reporting.

Have a look at the new e-commerce VAT rules effective by 2025 in Switzerland.

Conditions for the Annual Reporting Period

To qualify for annual VAT reporting, companies must meet two key conditions:

  1. Annual Taxable Turnover Threshold: The annual taxable turnover should not exceed CHF 5,005,000. This threshold ensures that the option for annual reporting is primarily available to SMEs and smaller businesses.
  2. Compliance History: The taxpayer must have a clean compliance record, having filed VAT returns and paid all tax liabilities fully and on time in the last three tax periods. The Swiss tax authorities may refuse or revoke the authorization for annual reporting in the case of taxable persons who fail to comply or only partially comply with their reporting and payment obligations.

If you apply for the annual reporting period, the periodicity must be maintained for at least a full tax year.

Additionally, businesses opting for annual VAT reporting will be required to make advance payments or VAT installments to the tax authority. Both the amount and frequency for these advance payments will be calculated by the SFTA (Swiss Federal Tax Authorities) based on the amounts reported the previous reporting period. The SFTA will assess these payments alongside the application for annual reporting.

The advance payments serve as a way to ensure a steady stream of revenue for the SFTA and prevent potential underpayment of VAT. However, they are considered as a provisional estimate, therefore, any excess advance payments will be refunded to the taxpayer after reconciliation with the final tax position reported in the annual return.

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