Key points at a glance
- You can opt for the net tax rate if your turnover is no more than CHF 5'024'000 and your tax at the net tax rate no more than CHF 108'000 a year (Art. 37 VATA).
- You calculate gross turnover including VAT × net tax rate. You don't deduct any input tax - it is already factored into the rate. Returns are filed every six months.
- There are ten rates from 0.1% to 6.8%. On your invoices, you still always show the statutory rate, for example 8.1%.
- Newly registered? Then you must apply for the net tax rate within 60 days of receiving your VAT number - otherwise you have to use the effective method for at least three full tax periods.
What is the net tax rate?
Under the effective method, you deduct the input tax from your purchase receipts from the VAT on your turnover. The net tax rate simplifies this: the Federal Tax Administration (FTA) has set a rate for each industry that already takes the typical input tax of that industry into account (Art. 37 para. 3 VATA). You still need receipts for your bookkeeping, but no longer one by one for VAT.
For an overview of both methods, see Receipts and VAT made easy; how to fill in the form in the FTA portal is explained in VAT return step by step. This article answers the question that comes first: is the net tax rate right for you?
Who can use the net tax rate
- Turnover: no more than CHF 5'024'000 a year from taxable supplies.
- Tax: no more than CHF 108'000 a year, calculated at your net tax rate. The higher your rate, the lower the turnover limit - at 6.2% it is around CHF 1.74 million (see the table below).
- Excluded are, among others, businesses using group taxation, businesses with their registered office abroad, or in Samnaun and Sampuoir (Art. 77 VATO).
How the calculation works
The tax is the total of your taxable consideration including VAT times the rate the FTA has approved for you (Art. 37 para. 2 VATA). So what counts is the gross amount of your invoices, not the net amount.
- Every six months: as a rule twice a year, each time within 60 days of the end of the half-year (Art. 35 VATA). With turnover of no more than CHF 5'005'000, you can apply to file annually.
- No input tax deduction, not even for large purchases.
- Exports and supplies abroad are declared in box 200 and deducted again in box 220 or 221 - you owe no tax on them. But you don't get back the input tax on the purchases you made for them.
The ten net tax rates
Which rate applies to your activity is set out in the FTA Ordinance on the net tax rates by industry and activity (SR 641.202.62, in force since January 1, 2025; in German, French and Italian only). A selection from the annex:
| Rate | Examples | Max. turnover |
|---|---|---|
| 0.1% | Bakery/confectionery: production | CHF 5.024 million |
| 0.6% | Kiosk: retail | CHF 5.024 million |
| 1.3% | Trade in computer hardware and software, trade in bicycles and motorcycles | CHF 5.024 million |
| 2.1% | Building materials: trade; hotel: accommodation at the special rate | CHF 5.024 million |
| 3.0% | Clothing: trade | CHF 3.60 million |
| 3.7% | Carpentry/joinery | CHF 2.92 million |
| 4.5% | Electrical installation business, bicycle/motorcycle repairs | CHF 2.40 million |
| 5.3% | Hair salon, painting and decorating, taxi company, restaurant (standard rate) | CHF 2.04 million |
| 6.2% | Graphic design studio, IT services, fiduciary/accounting office, architecture firm | CHF 1.74 million |
| 6.8% | Translation agency, temporary staffing agency | CHF 1.59 million |
The turnover limits in the last column apply in the first year or in the year before you switch, and follow from the CHF 108'000 tax limit. Rates for manufacturing only apply if the material is included in the price, rates for trade only to new goods.
Worked example: effective method or net tax rate?
Example 1: graphic designer with little input tax (net tax rate 6.2%)
Nina runs a graphic design studio as a sole proprietorship. In a year, she invoices CHF 150'000 excluding VAT; with 8.1%, that's CHF 162'150. She spent CHF 20'000 excluding VAT on software, computers and office supplies, with CHF 1'620 in input tax.
- Effective method: CHF 12'150 output tax − CHF 1'620 input tax = CHF 10'530.
- Net tax rate: CHF 162'150 × 6.2% = CHF 10'053.30, spread over two half-years.
With the net tax rate, Nina pays CHF 476.70 less and doesn't have to document any input tax. Both methods would cost the same at CHF 2'096.70 input tax, i.e. at around CHF 25'900 of purchases excluding VAT at the standard rate - above that, the effective method is cheaper.
Example 2: carpentry business with lots of material (net tax rate 3.7%)
Marco invoices CHF 400'000 excluding VAT, i.e. CHF 432'400 including VAT. Wood, fittings and subcontracted work cost him CHF 200'000 excluding VAT, and he also buys a CNC machine for CHF 60'000.
- Effective method: CHF 32'400 output tax − CHF 21'060 input tax = CHF 11'340.
- Net tax rate: CHF 432'400 × 3.7% = CHF 15'998.80.
In the year of the investment, the net tax rate costs him CHF 4'658.80 more. Without the machine, the effective method would come to CHF 16'200 - and the net tax rate would be CHF 201.20 cheaper. The industry rate reflects average input tax, not your particular purchase.
Simplified examples at the standard rate of 8.1%. You can check your own figures in the VAT calculator, which includes a small net tax rate calculator.
When the net tax rate pays off - and when it doesn't
It tends to pay off if your input tax is below your industry's average and you want to save time - typical for consulting, graphic design, IT or fiduciary services run as a sole proprietorship.
It tends to be a poor fit if
- you are planning large investments - a vehicle, machines, a renovation. With the net tax rate, the input tax on them is lost.
- you buy in a lot of material or subcontracted work, more than is usual for your industry.
- you export a lot or provide services abroad: you owe no tax on them anyway, but you bear the input tax on your purchases.
- you want to opt to tax excluded supplies voluntarily, for example renting out business premises - this option is not available with the net tax rate (Art. 77 para. 3 VATO).
Applying and switching: deadlines and minimum periods
- When you register: notify the FTA within 60 days of receiving your VAT number (Art. 78 VATO). If you miss this deadline, you have to use the effective method for at least three full tax periods.
- Switching later: only at the start of a tax period (usually the calendar year), notified no later than 60 days after it begins - for 2027, that means by early March 2027 (Art. 79 and Art. 81 VATO). You apply in the FTA portal.
- Minimum period: you keep the net tax rate for at least one tax period. If you switch to the effective method, you can only switch back after three years at the earliest (Art. 37 para. 4 VATA).
- Corrections when switching: moving from the effective method to the net tax rate, you repay the input tax previously deducted on the current value of your assets and stock, declared in the last return before the switch (box 415). The other way round, you deduct the tax on the current value in the first return after the switch (deferred input tax deduction, box 410). A clean asset register helps. If the FTA adjusts your net tax rate (other than because the VAT rates change), you may exceptionally switch earlier (Art. 78 para. 3 and 81 para. 2 VAT Ordinance).
- Limits exceeded: if you exceed one of the limits in three consecutive tax periods, you have to switch to the effective method (Art. 81 para. 3 VATO).
Several activities: the 10 percent rule
Since 2025, the FTA approves a separate rate for every activity that accounts for more than 10% of your total taxable turnover - previously, no more than two rates were possible (Art. 86 VATO). Activities with the same rate are added together; what counts is the expected turnover in the first 12 months, or the turnover of the three previous tax periods. Example: an IT sole proprietorship (6.2%) that regularly makes more than 10% of its turnover selling hardware also gets 1.3% for that. How smaller amounts are allocated is set out in VAT Info 12 (in German).
Typical mistakes
- Net tax rate on the invoice: your customers always get the statutory rate (8.1%, 2.6% or 3.8%), never 6.2%.
- Net instead of gross: the net tax rate applies to turnover including VAT. If you calculate on net amounts, you pay too little.
- Investment not planned for: if a large purchase is coming up, run the numbers before switching - you are tied in for at least one tax period.
How it works in Easly
You set your VAT method and your approved net tax rate once in the settings. Easly then prepares the VAT return with the box numbers of the FTA form, as PDF and Excel:
- Net tax rate: gross turnover in boxes 200, 299 and 323, the tax at your rate and the amount payable.
- Effective method: tax for each rate and the input tax from your receipts in boxes 400 and 405.
- Period and deadline: quarterly, semi-annually or annually; the dashboard reminds you of the deadline, and you mark filed periods as done.
What Easly doesn't do for you
You apply for the net tax rate yourself, and you file the return yourself in the FTA portal. Easly works with one net tax rate; if the FTA has approved several, you split the turnover yourself. The input tax corrections when switching methods and the choice of method - ideally together with your fiduciary - are also up to you.
Frequently asked questions
Which net tax rate applies to me?
The FTA approves the rate for your activity, based on the annex to the ordinance on net tax rates. Graphic design studios and IT services, for example, have 6.2%, hair salons 5.3% and carpentry businesses 3.7%.
Can I deduct input tax on an investment with the net tax rate?
No. Input tax is included in the rate as a flat amount, even for large purchases. If an investment is coming up, check before switching whether the effective method would be cheaper.
How soon can I switch back?
You must keep the net tax rate for at least one tax period. After switching to the effective method, you can only switch back after three years at the earliest. Switches take effect at the start of a tax period and must be notified within 60 days.
Do I have to file every six months with the net tax rate?
As a rule, yes. With turnover of no more than CHF 5'005'000 a year, you can apply to the FTA to file annually (Art. 35 para. 1bis VATA).
Information as of: see above, 2026 figures. Sources: Value Added Tax Act (Art. 34, 35 and 37 VATA), VAT Ordinance (Art. 77–81 and 86 VATO), FTA Ordinance on net tax rates (SR 641.202.62, in German), the FTA page on net tax rates and flat tax rates (in German) and VAT Info 12 Net tax rates (in German). This article is not a substitute for tax or accounting advice.