Swiss VAT registration: the CHF 100,000 threshold and when voluntary registration pays off

For many founders, VAT liability is the first big tax question. The familiar rule of thumb is: from CHF 100,000 in turnover. That is correct, but the details determine the date from which you owe tax. If you miss it, you may have to pay VAT retrospectively without being able to charge it to your customers.

The basic rule

Under Art. 10 of the VAT Act, you are liable for VAT if you run a business, meaning you independently carry out a professional or commercial activity aimed at generating ongoing income and trade under your own name. Legal form, purpose and the intention to make a profit are irrelevant.

You are exempt if, within one year, you generate less than CHF 100,000 in turnover from taxable supplies in Switzerland and abroad. For non-profit sports and cultural associations run by volunteers, and for charitable organisations, the threshold is CHF 250,000.

Which turnover counts?

• Switzerland and abroad: sales to foreign customers count too, as do exports.
• Excluding VAT: turnover is based on the agreed consideration, without the tax.
• Taxable supplies only: services exempt from VAT under Art. 21 of the VAT Act do not count. These include, for example, certain services in healthcare, education, insurance and finance, as well as the letting of residential property.

Example: a licensed physiotherapist earns CHF 140,000 from exempt medical treatments and CHF 15,000 from selling training equipment. Only the CHF 15,000 counts towards the threshold, so she remains exempt.

When does VAT liability start?

For existing businesses, the exemption ends at the close of the financial year in which the threshold was reached. If the business was not active for a full year, turnover must be extrapolated to a full year.

When you start a new business or expand your activities, the rule is this: if, given the circumstances, you can expect to reach the threshold within the next twelve months, VAT liability starts immediately. If you cannot yet judge this at the start, you must reassess no later than three months in. If it then turns out that you will reach the threshold, VAT liability starts, at your choice, retrospectively from the start or from the date of the reassessment, at the latest from the beginning of the fourth month.

Three examples

Example 1: a clear start. An electrician takes over a business with annual turnover of around CHF 400,000 on 1 March 2026. He is liable for VAT from 1 March.

Example 2: an uncertain start. A photographer starts on 1 February 2026 with no client base. After three months, it is clear that if orders continue at the same level she will reach around CHF 120,000 a year. Her VAT liability starts, at her choice, on 1 February or at the latest on 1 May 2026.

Example 3: slow growth. A carpenter starts on 1 April 2025 and earns CHF 80,000 by the end of the year. Extrapolated to a full year, that is around CHF 106,667. The threshold has therefore been reached and the exemption ends at the close of the 2025 financial year. He is liable for VAT from 1 January 2026.

Registration: 30 days

Once you become liable for VAT, you must register with the Swiss Federal Tax Administration (FTA/ESTV) within 30 days of the start of your liability, without being asked. The FTA assigns a VAT number based on your business identification number (UID). Registration is electronic, for example via the FTA portal or EasyGov, the federal government's online service desk for businesses.

You should decide two things at the same time as you register:

• Accounting method: if you want to use the net tax rate method (Saldosteuersatz), you must notify the FTA within 60 days of receiving your VAT number. Otherwise, the effective method applies for at least three tax periods.
• Reporting period: quarterly, half-yearly with the net tax rate method or, on application, annually if your turnover is up to CHF 5,005,000.

Voluntary registration: waiving the exemption

Even if you stay below the threshold, you can choose to become liable for VAT. The law calls this waiving the exemption (Art. 11 VAT Act). The waiver must apply for at least one tax period and can take effect no earlier than the start of the current tax period.

When it can pay off:

• Most of your customers are VAT-registered businesses. For them, the VAT on your invoice is a pass-through item they reclaim as input tax.
• You are investing heavily at the start, for example in machinery, vehicles or fit-out. As a VAT-registered business, you can deduct the input tax on these costs.
• You expect to reach the threshold soon anyway and want your prices and processes set up for VAT from day one.

When it probably does not:

• Your customers are private individuals. You would either have to raise your prices by 8.1% or pay the tax out of your own margin.
• You have hardly any input tax and want to keep the admin to a minimum.

Worked example: a B2B start-up invests CHF 60,000 net in equipment in its first year and generates CHF 50,000 in turnover. With voluntary registration, it owes CHF 4,050 VAT on its turnover but can deduct CHF 4,860 input tax on its investments, so it receives CHF 810 back from the FTA. Its customers deduct the VAT as input tax in turn, so they bear no extra cost.

Deregistering when turnover falls

If a VAT-registered business drops below the threshold and expects not to reach it in the following tax period either, it must deregister. If it does not, it is treated as voluntarily registered from the start of the following tax period.

Common misconceptions

• "The threshold applies per calendar year from the date I started." Not quite. When you start a business, what counts is the forecast for the first twelve months. If you can foresee exceeding the threshold, you are liable for VAT immediately.
• "Exports don't count." They do. The threshold refers to turnover in Switzerland and abroad.
• "Without a VAT number, I don't have to file anything." If you miss the registration, you still owe the tax from the start of your liability. Because prices were usually agreed without VAT, the tax then has to be carved out of the amounts you have already received.
• "Voluntary registration means I can leave whenever I like." Waiving the exemption applies for at least one full tax period.

Checklist for founders

1. Make a realistic estimate of your expected turnover for the first twelve months.
2. Leave out exempt supplies.
3. If in doubt, reassess no later than three months in and document it.
4. For existing businesses, check turnover at year-end and extrapolate partial years.
5. Register within 30 days of the start of your VAT liability.
6. Choose your accounting method and reporting period deliberately.
7. Consider voluntary registration if you have B2B customers and high investment costs.
8. Check your own entry in the UID register, which also shows your status in the VAT register.

Bookkeeping that is kept up to date shows early on when you are getting close to the threshold. In Buchsnap, your cumulative turnover for the current year is visible at any time, so the question of VAT liability does not suddenly come up at the year-end closing.

Last updated: October 2026. This article does not replace individual advice.