Key points at a glance
- You are exempt from VAT as long as, within one year, you generate less than CHF 100'000 in revenue from supplies not excluded from tax - in Switzerland and abroad combined, excluding VAT, based on agreed consideration (Art. 10 para. 2 of the Value Added Tax Act (VATA)).
- When you start a business, you are liable right away if it is foreseeable that you will reach the threshold in the first 12 months. Otherwise, at the end of the financial year, you convert your revenue to a full year (Art. 9 of the VAT Ordinance (VATO)).
- You must register with the Federal Tax Administration (FTA) of your own accord within 30 days after your tax liability begins (Art. 66 VATA).
- You can register voluntarily at any time, at the earliest from the start of the current calendar year, and you then remain registered for at least one year (Art. 11 VATA).
The principle: anyone running a business is liable
In principle, anyone who runs a business independently and under their own name is liable for VAT - regardless of legal form or profit motive (Art. 10 para. 1 VATA). The revenue threshold is an exemption from this: CHF 100'000 for sole proprietorships, GmbHs, AGs and all other businesses, and CHF 250'000 for non-profit, volunteer-run sports and cultural associations and charitable organizations (para. 2 let. a and c). You are only exempt if your revenue is below the threshold - exactly CHF 100'000 is already enough.
Which revenue counts - and which doesn't
What counts is the agreed consideration excluding VAT (Art. 10 para. 2bis VATA): what you have invoiced, not what has been paid. Since 2018, revenue earned abroad counts too. According to the FTA and VAT Info 02 Tax liability (section 2.1, in German):
- Counts: taxable supplies in Switzerland, supplies exempt from tax such as exports, and supplies abroad that would be taxable in Switzerland - for example a web project for a client in Germany.
- Doesn't count: supplies excluded from tax under Art. 21 para. 2 VATA, donations and subsidies, and income outside your business, such as your salary from employment.
Excluded supplies include medical treatment by healthcare professionals with a license to practice (no. 3), teaching, courses and lectures (no. 11), insurance services (no. 18), many banking and financial transactions (no. 19), and renting out apartments and commercial premises (no. 21; hotel rooms are taxable).
When tax liability begins
The law distinguishes two cases (Art. 14 para. 3 VATA, Art. 9 VATO):
- New business or new line of business: if, at the start, it must be assumed that you will reach the threshold within the following 12 months - for example because of firm orders - you are liable from day one. If that can't be assessed yet, you reassess no later than after three months. If the threshold will then be reached, you choose the start date: from the start of your business or from the reassessment, at the latest from the beginning of the fourth month.
- Business that was exempt so far: the exemption ends after the financial year in which you reached the threshold. If you weren't active for the whole year - typical in your first year - you convert your revenue to a full year.
You can quickly check whether your planned revenue exceeds the threshold with the hourly rate calculator: hourly rate times billable hours gives you your annual revenue.
Example: starting a business in August 2026
Sara opens a graphic design studio on August 1, 2026. At first she expects less than CHF 100'000 a year and does not register. By the end of December - after five months - she has issued these invoices (excluding VAT):
| Supply | Amount | Counts? |
|---|---|---|
| Design work for clients in Switzerland | CHF 40'000 | yes |
| Logo for a company in Germany | CHF 3'000 | yes (supply abroad) |
| Teaching courses at a continuing education school | CHF 5'000 | no (education, Art. 21 para. 2 no. 11) |
| Relevant revenue in 5 months | CHF 43'000 | |
| Converted to 12 months (43'000 ÷ 5 × 12) | CHF 103'200 | threshold reached |
Sara becomes liable for VAT from January 1, 2027 and registers within 30 days. Without the German job, her annualized revenue would have been CHF 96'000 - and she would have remained exempt. Had she already had firm orders worth more than CHF 100'000 at the start, she would have been liable from August 1, 2026.
Registering - and what happens if you register late
You register online free of charge via the FTA page Register for VAT. Have your UID (business identification number) ready, your AHV number if you run a sole proprietorship, and a revenue forecast for your first financial year. The 30-day deadline after your liability begins applies "of your own accord" - the FTA won't remind you (Art. 66 para. 1 VATA).
Registering late doesn't move the start date: the FTA registers you retroactively, and you owe VAT on all revenue since that date - even if you didn't charge it. It can rarely be passed on to clients afterwards, so it comes out of your margin. Default interest may be added (Art. 87 VATA), and failing to register can lead to a fine (Art. 98 let. a VATA).
Registering voluntarily
Even below CHF 100'000, you can waive the exemption (Art. 11 VATA) - at the earliest from the start of the current tax period, i.e. the calendar year, and for at least one tax period (Art. 14 para. 4 and Art. 34 VATA).
| Pros | Cons |
|---|---|
| Input tax deduction: you reclaim the VAT on purchases and investments - for example a computer, tools or a vehicle when you start. | Private clients: they can't deduct input tax. You add 8.1% or earn that much less. |
| Business clients with a VAT number deduct your VAT as input tax - you don't become more expensive for them. | Admin work: quarterly or semi-annual returns, receipts with VAT correctly shown, deadlines. |
| Image: a VAT number on your invoice looks more established to some business clients. | Commitment: you remain liable for at least one full tax period. |
Acquisition tax: possible even without a VAT number
Services from businesses based abroad that are not entered in the Swiss VAT register - for example translation, consulting or design by a foreign freelancer - are subject to acquisition tax (Bezugsteuer). If you are not liable for VAT, you owe it as soon as you purchase such services for more than CHF 10'000 in a calendar year (Art. 45 VATA). You then register with the FTA within 60 days after the end of the calendar year and declare the services (Art. 66 para. 3 VATA). Electronic services supplied to non-taxable persons are excluded; for these, the foreign provider must register itself. More on the FTA page Acquisition tax VAT.
What changes after you register
- VAT number: the FTA assigns you a number that matches your UID with the suffix "MWST" (or TVA/IVA), for example CHE-123.456.789 MWST; the English abbreviation "VAT" is not permitted (FTA: UID).
- Invoices: from the start of your liability, your VAT number, the rate and the tax amount belong on every invoice (Art. 26 VATA). Before that, you must not show VAT; if you do anyway, you owe it (Art. 27 VATA). The VAT calculator converts prices including and excluding VAT.
- Choosing a method: effective method with input tax deduction, or the net tax rate method (possible up to CHF 5'024'000 in revenue and CHF 108'000 in tax per year, Art. 37 VATA). You must notify the FTA of the net tax rate method within 60 days of receiving your VAT number; otherwise you have to use the effective method for at least three full tax periods (Art. 78 VATO).
- Reporting period: quarterly with the effective method, semi-annually with the net tax rate; annually on request with revenue of no more than CHF 5'005'000 (Art. 35 VATA). How to file is explained in VAT return step by step; how to collect the receipts for it, in Receipts and VAT made easy.
Deregistering when revenue falls
If your revenue falls below the threshold and is not expected to reach it in the following tax period either, you must deregister - at the earliest as of the end of the tax period in which you fell below the threshold. If you don't deregister, this counts as a voluntary waiver of the exemption (Art. 14 para. 5 VATA; FTA: deregistering for VAT). If you close your business, you deregister within 30 days (Art. 66 para. 2 VATA).
Typical mistakes
- Counting only Swiss revenue: exports and supplies abroad are included.
- Counting payments received instead of invoices: what counts is the agreed consideration excluding VAT.
- Not annualizing your first year: CHF 60'000 in six months is CHF 120'000 over a full year.
- Waiting although it was foreseeable: with firm orders above the threshold, liability begins when you start.
- Missing the net tax rate deadline: 60 days after receiving your VAT number.
How VAT registration fits into setting up your business is described in Starting a sole proprietorship: step by step.
How it works in Easly
Easly supports you before and after you register:
- Not yet liable for VAT: in the setup wizard, you leave the VAT box unchecked - Easly adds the note referring to Art. 10 para. 2 let. a VATA to your invoices and doesn't show any VAT.
- Revenue at a glance: the income statement and the invoice overview in Excel show you at any time what you have invoiced so far - the basis for your annualized figure.
- After registering: you switch on VAT with your rate and method; products and services carry their VAT rate. Easly prepares the VAT return using the effective method or the net tax rate, quarterly, semi-annually or annually, and the dashboard reminds you of the deadline.
What Easly doesn't do for you
Whether and from when you are liable for VAT is your call - Easly doesn't do the annualizing, the separation of excluded supplies or the registration with the FTA for you. Easly doesn't record acquisition tax either; in the VAT return, it is flagged as "not recorded – check".
Frequently asked questions
Does my salary from employment count toward the threshold?
No. Only your business's revenue from supplies not excluded from tax counts. Salary from a job is not part of it.
In my first year, I only reached CHF 100'000 in November. When does my liability begin?
If it wasn't foreseeable at the start, the exemption ends after the financial year in which you reached the threshold - so if your financial year is the calendar year, on January 1 of the following year (Art. 14 para. 3 VATA, Art. 9 para. 3 VATO). You must register within 30 days.
Can I register voluntarily with retroactive effect to reclaim input tax?
Only within the current calendar year: waiving the exemption is possible at the earliest from the start of the current tax period (Art. 14 para. 4 VATA). After that, you remain liable for at least one tax period.
Do I have to account for VAT if I only offer physiotherapy?
No, as long as you only provide excluded supplies such as medical treatment with a license to practice (Art. 21 para. 2 no. 3 VATA). If you also sell, for example, training equipment, that revenue counts toward the CHF 100'000 threshold.
Information as of: see above, 2026 figures. Sources: Value Added Tax Act (Art. 10, 11, 14, 21, 26, 27, 34, 35, 37, 45, 66, 87 and 98 VATA), VAT Ordinance (Art. 9 and 78 VATO), VAT Info 02 Tax liability (in German) and the FTA pages on tax liability, registration, deregistration and acquisition tax. This article is not a substitute for tax or accounting advice.