Taxes

In Switzerland, sole proprietorships and partnerships are not taxed directly, but the tax burden falls on the individual partners. Taxes are levied on the income and partly on the assets of the partners at the federal, cantonal, and municipal levels.

Business owners must make an adjustment for input tax when using their own products privately, for which input tax has been claimed. This serves the correct allocation and tax treatment of such transactions.

Notional input tax can be deducted for untaxed agricultural products or used individualizable items. Conditions for this are domestic reference and entrepreneurial use.

The withholding tax in Switzerland aims to prevent tax evasion by taxing returns on capital assets and certain other income at the source. Taxpayers can reclaim this tax, provided they declare their income correctly.

Companies can now register entirely online for value-added tax, making paper forms and postal dispatch unnecessary. The online process also directly checks the prerequisites for VAT accounting.

In Switzerland, certain services, such as medical treatments and educational offers, are exempt from value-added tax. These tax exemptions serve socio-political or economic objectives but do not allow for the deduction of input tax.

In Switzerland, the standard VAT rate is 8%, while certain goods such as food and medicine are taxed at only 2.5%. In the hospitality sector, the reduced rate is only applied if there are no options for on-site consumption.

VAT audits are conducted by the FTA on a sampling basis to verify the self-assessment of the tax. Audits involve the examination of accounting documents and final accounts, with corrections made for any discrepancies.

The value-added tax (VAT) in Switzerland is 8% (standard), 2.5% (reduced), and 3.8% (special rate), targeting domestic end consumption. It is a net all-phase tax, where the end consumer pays the tax, while earlier stages utilize the input tax deduction.