VAT for online shops:the threshold that makes you liable.

The CHF 100,000 threshold

The question usually comes up in a shop’s second or third year, at the point where turnover rises noticeably for the first time. The law is brief here: exempt from tax liability is anyone who, within one year, generates less than CHF 100,000 of turnover in Switzerland and abroad from supplies that are not exempt without credit.^[1] Liability therefore does not depend on legal form or on making a profit. It depends on running a business, appearing under your own name, and reaching that figure.^[1]

Three points are regularly missed. First, the figure is worldwide turnover, not only Swiss turnover. A shop that also ships to Germany adds both together. Second, it is turnover, not profit. Third, supplies exempt without credit under Article 21 paragraph 2 MWSTG drop out of the calculation, which rarely matters in ordinary retail.

When liability begins

For a business with its seat in Switzerland, liability itself begins when business activity starts. As long as turnover stays below the threshold, the business is exempt. That exemption ends as soon as total turnover in the last financial year reached the threshold, or once it is foreseeable that the threshold will be exceeded within twelve months of starting or expanding the activity.^[3]

The second half of that sentence is the one that matters in practice. If you open a second sales channel, add a product line or run a campaign, and it becomes foreseeable that you will pass the threshold, you do not wait for the year end. Liability starts at the moment of expansion. From then, 30 days remain to register with the Federal Tax Administration, unprompted and in writing.^[5]

The same logic applies in reverse. If the relevant turnover falls below the threshold and it is expected that it will not be reached in the following tax period either, the business must deregister. Failing to do so counts as waiving the exemption, and liability simply continues.^[4]

Goods from abroad and platforms

Where the seller sits abroad and sends parcels into Switzerland, a separate rule applies. Supplies from abroad count as domestic supplies once the seller generates at least CHF 100,000 of annual turnover from small consignments.^[9] A small consignment is one where the import tax amount is CHF 5 or less, so no import tax is levied.^[12] The statutory basis is the exemption for imports carrying an insignificant tax amount.^[10]

Once the threshold is reached, every supply into Switzerland is subject to domestic VAT after entry in the register, not only the small ones.^[11] Entry takes effect from the month following the month in which the threshold was reached.^[12] A seller who leaves the VAT number off the parcel label and the invoice risks customs charging the tax to the customer, so the consignment is taxed twice.^[11]

Since 1 January 2025, platform taxation applies on top of that.^[14] Anyone who enables a supply through an electronic platform, by bringing sellers and buyers together to conclude a contract, counts as the supplier towards the buyer. In legal terms there are then two supplies, one from the seller to the platform and one from the platform to the buyer.^[13] For merchants on marketplaces this means that, for VAT purposes, their counterparty is the platform and no longer the end customer.

Acquisition tax on services from abroad

The second route into liability runs through purchasing, and it catches many businesses out. Anyone acquiring services from companies seated abroad that are not entered in the Swiss register owes acquisition tax on them. For recipients who are not otherwise liable, this applies once they acquire such services for more than CHF 10,000 in a calendar year.^[15]

For an online shop that figure is reached quickly. Think of agency fees, development work, consultancy or licences from providers without Swiss registration. Registration here is not due within 30 days but within 60 days of the end of the calendar year concerned, together with the declaration of the services acquired.^[6]

Effective or flat rate, quarterly or annual

After registration, two questions matter more for your workload than the registration itself: which method you use, and how often you file.

The default is the effective method with quarterly returns. Under the net tax rate method, returns are filed half-yearly.^[16] Two further options exist on request: monthly, where there is a regular input tax surplus, which suits shops in a build-up phase, and annually, where taxable turnover is no more than CHF 5,005,000 per year. Annual filing has been available since 1 January 2025.^[16]

The net tax rate method applies an industry rate approved by the Federal Tax Administration to turnover including tax, with the usual input tax ratio already priced in. It saves work but costs you the effective input tax deduction. For a shop with a high margin and little purchasing it often pays off; for a shop with thin margins and heavy purchasing it rarely does.

Whichever method you use, one deadline tends to be tight in practice: the return must be filed, unprompted, within 60 days of the end of the reporting period.^[18]

What changes in the shop and in the books

Registration changes more than one line on an invoice. The rates are 8.1 per cent as standard, 2.6 per cent for foodstuffs, books, newspapers, medicines and other listed goods, and 3.8 per cent for accommodation. These rates have applied since 1 January 2024.^[7][8]

• Price display. Towards private customers, prices are shown inclusive of VAT. In the shop that means gross prices stay and the tax is backed out, or prices go up.
• Rate per article. A range with food and non-food needs two rates. The rate belongs on the article, not on the order.
• Shipping charges. As a rule they follow the main supply. Mixed baskets need a clean allocation.
• Credit notes and returns. Every correction has to carry the tax amount with it, otherwise the return no longer matches turnover.
• VAT number. It belongs on the invoice, in the legal notice and, for supplies from abroad, on the parcel label.
• Input tax. Purchase invoices are only deductible if they are complete. That includes documents from shop and advertising platforms.

What an automation takes over

The legal points are fixed; the work behind them is not. Four places can be automated reliably, and they are exactly the ones where mistakes happen day to day.

1. Watch the turnover threshold. A rolling twelve-month figure across every channel, shop, marketplaces and offline sales together, with an alert at 80 per cent of the threshold. The decision then falls before you cross it, not after.
2. Count purchases from abroad. A running total of invoices from providers without a Swiss VAT number, with a warning as the CHF 10,000 acquisition tax line approaches.
3. Keep tax rates on the article. The rate comes from the merchandise system and travels with every import into shop and accounting, instead of being set by hand in the shop.
4. Prepare the return. Turnover per rate, credit notes, returns and acquisition tax compiled per period, so that all that remains is checking and filing.

How to proceed

1. Establish turnover properly. Add up every channel and every country for the last twelve months, then deduct supplies that are exempt without credit.
2. Make a forecast. If it is foreseeable that the threshold falls within twelve months, that date counts, not the year end.^[3]
3. Choose the method. Work out your input tax ratio roughly and compare it with the industry rate before applying for the net tax rate method.
4. Register. In writing with the Federal Tax Administration, within 30 days of liability starting.^[5]
5. Convert the systems. Rates on the article, VAT number in the invoice template and the legal notice, accounting on the chosen method, all on the same effective date.
6. Check the first return. Reconcile shop turnover against the books before filing, then file within 60 days.^[18]

Common questions