The Federal Council of Switzerland has approved VAT reform, effective 1 January 2025.

The reforms introduce several key changes, which are as follows:

  • A new voluntary balance and flat-rate tax method to simplify compliance for VAT flat rate scheme taxpayers, eliminating the need to record input tax.
  • When changing accounting methods, input tax corrections will be required. The reform also formalises the definition of digital platforms and imposes new tax collection obligations on them, making them responsible for VAT on sales facilitated through their interfaces.
  • Additional updates include taxing remotely provided services at the recipient’s location, revising place of supply rules for travel services and on-site cultural activities, and clarifying the service relationships between digital platforms, buyers, and sellers.
  • Certain medical and educational services will be exempt from VAT.

The electronic filing requirement will become mandatory for flat rate taxation, group taxation, and deregistration from 1 January 2027.