MWST Explained: VAT for Swiss Freelancers and Small Businesses
Switzerland's VAT is called MWST, runs at 8.1%, and has its own registration rules. Here's how it works and when you need to register.
Switzerland operates outside the EU VAT system and has its own value-added tax, called Mehrwertsteuer (MWST) in German, TVA in French, and IVA in Italian. The standard rate is 8.1%, significantly lower than Germany’s 19% or Austria’s 20%, but the mechanics are similar.
The Rates
Switzerland uses three MWST rates. The standard rate is 8.1%, applying to most goods and services. The reduced rate of 2.6% applies to food, non-alcoholic beverages, books, newspapers, and medicines. The special rate of 3.8% applies to accommodation services.
The Registration Threshold
You must register for MWST once your annual turnover from taxable supplies exceeds CHF 100,000. Below this threshold, you can operate without charging MWST, which is a significant advantage: Swiss buyers pay 8.1% less than they would from a registered supplier for the same service.
Unlike Germany and Austria, Switzerland’s threshold is fixed in Swiss francs and is not indexed to inflation. It has remained at CHF 100,000 for many years.
Voluntary registration is possible below the threshold if you regularly have significant input tax to reclaim (for example, if you import equipment or buy services from abroad that carry Swiss MWST).
Filing: MWST Returns to the ESTV
MWST returns are filed with the Eidgenössische Steuerverwaltung (ESTV), Switzerland’s Federal Tax Administration. Most businesses file quarterly. The return is due within 60 days of the end of each quarter.
Switzerland uses an effective method (Effektive Abrechnungsmethode) where you report actual input and output tax, or a simplified flat-rate method (Saldosteuersatzmethode) where a flat rate is applied to turnover and reduces reporting complexity. Most freelancers use the flat-rate method initially and switch to effective once volumes justify the complexity.
What Goes on a Swiss Invoice
A MWST-compliant invoice must include: your name and full address, your UID-Nummer (starting with CHE, then 9 digits), the customer’s name and address, the invoice date, a description of goods or services, the net amount, the applicable MWST rate and amount, and the gross total.
Switzerland’s UID-Nummer is your business registration number. It is issued when you register with the Handelsregister (commercial register) for companies, or directly with the ESTV for sole traders registering for MWST.
Cross-Border Services
Swiss businesses providing services to EU clients follow reverse charge rules from the EU side: you invoice without MWST, and the EU customer self-assesses VAT in their own country. Services received from EU suppliers may be subject to import tax (Bezugssteuer) in Switzerland, which you self-assess and report on your MWST return.
How KontoMatch Helps
KontoMatch handles Swiss franc amounts and recognizes MWST at 8.1%, 2.6%, and 3.8% when processing your invoices. Your expense records show the correct net amounts and MWST breakdown, giving your Treuhänder (fiduciary/tax advisor) clean data for your quarterly MWST return without manual rate-checking on every document.