Net tax rate method
The partially revised VAT Act will enter into force in Switzerland on 1 January 2025. Due to the treaty obligation for parallel VAT legislation, the partial revision of the Liechtenstein VAT Act will take effect at the same time. A significant change to the new VAT Act concerns the net tax rate method.
The most important changes are:
- Corrections must be made when switching from the effective accounting method to the flat-rate tax method. At the time of the change, the input tax previously deducted on the current value of the goods and services, including the portions corrected as contribution tax, must be refunded to the STV. The change is possible after an entire tax period.
- Corrections must be made when switching from the flat-rate tax method to the effective accounting method. The tax charged on the current value of the goods and services at the time of the change can be claimed. The change is possible after an entire tax period.
- Individual balance and lump-sum tax rates have been reviewed and redefined by the STV.
- Special procedures for export deliveries (form 1050), crediting of notional input tax (form 1055) and margin taxation (form 1056) no longer apply.
- Industries in which several activities are usually carried out that would have to be accounted for at different net tax rates on their own were previously able to account for the listed ancillary activities at the authorised net tax rate, provided the turnover from ancillary activities did not exceed 50% of the total taxable turnover. Now, any activity that accounts for more than 10% of total taxable turnover must be charged at the respective net tax rate.
- The net tax rate for ‘Travel agency: pure retailer’ is no longer applicable. The services are now exempt from VAT and must be declared in item 230 of the VAT statement. The option (voluntary taxation) is not possible with the net tax rate method
Do you have any questions about the VAT changes to the net tax rate method? The LIREX lions will be happy to help you.
