Services exempt from value-added tax

Not all services in Switzerland are subject to value-added tax. Some services are completely exempt from value-added tax.

Exempt from Tax

Art. 21 of the Value-Added Tax Act governs the services for which no value-added tax is owed. The reason for the exemption often lies in socio-political or economic considerations. Here is a brief list of the most important exemptions:

• Hospital treatment, services provided by doctors
• Social welfare services
• Education
• Theatre and film performances
• Transactions in the area of money and capital traffic
• Lottery sales
• Sale of products from agriculture, forestry, etc.

The law knows still a whole range of additional areas that are exempt from taxation. However, the exemption according to Art. 21 VAT Act does not only have advantages. Although no value-added tax needs to be paid on these services, the input tax deduction is, in return, also not possible. Therefore, for almost all exemptions, there is the option to voluntarily subject themselves to VAT. Art. 22 regulates these cases. By reporting to the Federal Tax Administration, the exemption rule can be waived and a company can voluntarily subject itself to VAT. Of course, VAT must then be paid for services previously exempted from value-added tax, but on the other hand, the full input tax deduction can also be claimed. Further information on opting can be found on the homepage of the Tax Administration.