What VAT methods are there?
Who is subject to VAT?
Companies with an annual turnover of more than CHF 100,000 must register for VAT. For companies with a turnover of less than CHF 100,000, registration is voluntary, but they can choose to do so in order to receive an input tax refund.
What are the net tax rate and effective method?
Companies are subject to the effective billing method by default; apply to the Federal Tax Office to use the net tax rate method. With the effective method, you pay the full VAT on your turnover, then reclaim the VAT (known as input tax) on your expenses.
The net tax rate method is a simplified method for calculating VAT. It is based on a fixed rate that is applied to gross sales. You cannot reclaim input tax for this.
If you are not sure which method is right for you, ask your accountant.
What are the billing types “received” and “agreed”?
In the case of received billing, VAT is only due once payment has been received from the customer. In the case of agreed billing, however, VAT is due immediately after invoicing, regardless of whether payment has already been received or not. By default, you will follow the agreed method; you must apply to the Federal Tax Office to use the received method.
