Apply flat tax rate for a small business

In terms of value-added tax, a fundamental obligation exists to settle accounts effectively. However, in certain cases, the so-called flat-rate tax amount is also possible, which is a simplified accounting method.

Flat-Rate Tax Amount

A company fundamentally owes the regular value-added tax amount to the Federal Tax Administration (ESTV). This amount is evident from the invoice received by the customer. From this amount, the input tax already paid can be deducted. Thus, a company must make some effort to correctly collect the value-added tax. To reduce the administrative burden on small businesses, there is the option of a flat-rate tax amount. This tax rate allows companies to account for taxes at a flat rate. The collection of ordinary value-added tax amounts is omitted, easing administrative burdens for a company. Depending on the industry, the flat tax rate varies, being dependent on the input tax effort and private consumption.

Application Required for Flat-Rate Tax Amount

Anyone wanting to apply the flat-rate tax amount must register this with the Federal Tax Administration. This requires a written application. If one opts out of the flat-rate tax amount at the time of company establishment, it may only be switched to after three tax periods. Companies that generate a turnover of more than CHF 5'020'000 are excluded from using this simplified value-added tax accounting method.