Updated net tax rates from January 1, 2024 (due to VAT rate increase)

Due to the increase in VAT rates from January 1, 2024, the Federal Tax Administration (ESTV) has adjusted the Ordinance on the Net Tax Rates by Sector and Activity ( SR 641.202.62 ).

Rates until December 31, 2023 in percent	Rates from 01/01/2024 in percent
0.1	0.1
0.6	0.6
1.2	1.3
2.0	2.1
2.8	3.0
3.5	3.7
4.3	4.5
5.1	5.3
5.9	6.2
6.5	6.8

The appendix to the ordinance regulates which net tax rate applies to which activities. For certain activities, accounting at the net tax rate is now permitted.

In September 2015, the Federal Council decided that the net tax rates should be reviewed at least every seven years, starting in 2017. In July 2016, the FTA consulted the industry associations concerned.

financial consequences

The reduction in the net tax rates due to the reduction in the standard VAT rate from 8 percent to 7.7 percent and the lodging rate from 3.8 percent to 3.7 percent results in reduced income of 45-50 million francs per year.

The financial consequences of the other amendments to the ordinance can only be roughly estimated. It is not known whether the same companies will still use net tax rates after the change.

If no taxpayers switch to a different accounting method as a result of the changes, additional income of around CHF 10 million would be expected on balance, which would lead to a total reduction in income of CHF 35-40 million.

Term “net tax rate”

Net tax rates simplify accounting with the FTA significantly because the input taxes do not have to be determined. With this accounting method, the tax owed is calculated by multiplying the gross turnover, ie the turnover including tax, by the net tax rate approved by the FTA. The applicable rate for each branch or activity is set out in the regulation on the amount of net tax rates.

In principle, those taxable persons who meet both of the following conditions can use the net tax rates:

The taxable annual turnover (including tax) must not exceed CHF 5.005 million.
The tax owed may not exceed 103,000 francs per year. It is determined by multiplying the total taxable turnover by the net tax rate applicable to the relevant branch.

Additional information on the changes to the SSS and PSS and the options for changing the billing method

With the last statement for 2017, the taxpayers received additional information regarding the SSS and PSS. On January 1, 2018, most SSS and PSS will decrease due to the tax rate reduction. On the other hand, there are material changes, such as reallocations of sectors to the individual SSS or PSS. Material changes can mean, for example, that a second SSS has to be requested or that the billing method can be changed prematurely. The information sheet that was sent to the taxpayers can be found at the bottom of this page under “Documentation”.