The tax rates of value-added tax in Switzerland.

In Switzerland, there are currently three different levels of tax rates for value-added tax (VAT). In addition, there are services that are exempt from or not subject to VAT.

Tax Rates

According to Art. 25 VAT Act, the standard VAT rate is 8%. However, there are various exceptions. A reduced tax rate of 2.5% applies to the following products, among others:

• Tap water
• Foodstuffs
• Cattle, poultry, fish
• Cereals
• Animal feed
• Fertilizers
• Medicines
• Newspapers, magazines, books
• Services of radio and television companies

In addition to the reduced tax rate of 2.5% and the standard rate of 8%, there is also a special rate for accommodation services. An accommodation service is defined as providing lodging, including offering breakfast. When an accommodation service is provided, the special rate of 3.8% applies.

Exempt or Excluded Services

A whole range of services is exempt from value-added tax (the following list is not exhaustive). This includes, for example, hospital treatment and medical care in hospitals in the field of human medicine, services provided by social welfare and social security institutions, services in the field of education and training (excluding hospitality services and accommodation services provided in this context), sales at events (fairs and flea markets) by institutions engaging in exempt activities in the fields of medical treatment, social assistance, and social security, etc. For services exempt from value-added tax, there is an option available, except for insurance sales, sales in the field of money and capital transactions, as well as sales related to betting, lotteries, and other games of chance. In terms of real estate, the option is also limited to properties that are not exclusively used for private purposes (residence and/or weekend stay). The advantage of the option is that a deduction of input tax is possible in whole or in part.