VAT-exempt vs. zero-rated: the difference
Exempt from VAT or excluded from VAT — two terms that sound similar but have very different consequences for your Swiss sole proprietorship. Learn what applies to your industry.
The crucial difference
Excluded from VAT (von der MWST ausgenommen): you don't charge VAT on your invoices, and you cannot deduct input VAT either. This applies to medical services, insurance, and education, among others. Zero-rated (von der MWST befreit): you don't charge VAT on your invoices, but you can deduct input VAT. This applies to exports and certain cross-border services.
Why the distinction matters
If you're excluded from VAT: services and products you purchase include 8.1% VAT that you cannot reclaim. Your costs are up to 8.1% higher than those of a VAT-registered competitor. This is a significant competitive disadvantage if your clients are businesses (who could deduct VAT).
Voluntary VAT registration
Even if you are excluded from VAT, you can register voluntarily. This makes sense if your clients are mostly businesses that can deduct input VAT — your invoices become 8.1% cheaper for them (or the price stays the same and you earn more).
Accurate as of: The rates and amounts mentioned in this article reflect the state as of 7 August 2026. They are for information only and do not replace tax or legal advice. For binding information, contact the Swiss Federal Tax Administration (ESTV), your cantonal tax office, or a fiduciary.
Frequently asked questions
- Am I excluded as a therapist?
- Yes, recognized healthcare professions are excluded from VAT. This includes doctors, therapists, and alternative practitioners with a cantonal license. Check with the FTA for your specific situation.
- Can I register for VAT voluntarily even if I'm excluded?
- Yes, voluntary registration is possible. It's worth doing if your clients are businesses — they can deduct the VAT, and your service becomes net 8.1% cheaper for them (or you keep the price and earn 8.1% through input tax recovery).