VAT is calculated by fiscal period which generally corresponds to a calendar year. During each tax period, you must pay the tax.
You must choose between 2 methods of VAT settlement: the effective method or the method of settlement according to the net tax debt (TDFN) and flat rates (TAF). Depending on the method chosen, you will have to make your declarations either every 3 months or every 6 months.
VAT statements: which method to choose?
Effective settlement method
This method allows you to declare the services relating to the statement period while deducting the tax previously paid to your suppliers during this period. You must carry out this statement every 3 months, at the same time as the payment of the tax due.
Settlement method according to the net tax debt and flat rates
You can avoid calculating withholding tax by taking this simple approach: multiply your company's annual income (including VAT) by the net FTA tax rate for your industry. This rate is adapted to your sector and takes into account any early deductions you have requested (you will find a complete list of rates for each sector on the AFC website).
To follow this method, your company must meet the following conditions:
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The annual turnover does not exceed CHF 5,005,000.- of taxable benefits
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The amount of annual tax does not exceed CHF 103,000.- for the same period
We recommend this payment method because it saves you money. This is because you only have to make payments every six months. However, do not forget that the actual mode of payment may vary depending on the activity of your company.
As of January 1, 2018, and as part of the partial revision of the VAT Law, the rates of the net tax debt settlement method will change.
In addition to the settlement method, you must also choose the settlement method for your VAT…
VAT statement methods: what are the differences?
There are two methods of VAT settlement: settlement according to the agreed consideration and settlement according to the consideration received. Note that the settlement method you have defined must be kept at least during the current tax period.
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Statement according to the agreed consideration: if you opt for this type of statement, you must deduct the VAT when invoicing your customers. In the same way, you must pay VAT when issuing your invoices and deduct VAT when invoicing your customers. The payment of VAT occurs during the period in which the invoice is issued, even if its payment is not made until later.
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Settlement according to the consideration received: with this method of settlement, the VAT is due when you receive payment for your customers' invoices. You must deduct the VAT at the time of the actual payment of the invoice. Note that this method of settlement is subject to an authorization request from the Federal Tax Administration.
You can change your VAT statement method at the end of a tax period under conditions, listed in articles 106 and 107 of the Ordinance governing value added tax.