Net tax rate: the simple VAT accounting explained
The net tax rate method allows you to settle VAT with a flat rate instead of every single transaction. For many sole proprietorships, this is cheaper and much less work.
What is the net tax rate?
The net tax rate method (Saldosteuersatzmethode) is a simplified method for VAT accounting in Switzerland. Instead of calculating VAT on every individual transaction and deducting input VAT on every purchase, you apply a flat rate to your total taxable revenue. No more tracking input VAT — the flat rate covers both sides in one number.
How high is the net tax rate?
The rate depends on your industry, as defined by the Federal Tax Administration (FTA). For many service providers (consulting, design, software), the rate is around 6.0%. Across all industries it varies between 0.1% and 6.8%. The FTA publishes a detailed list — check which rate applies to your primary activity.
Who can use the net tax rate?
Sole proprietorships and partnerships with annual taxable revenue under CHF 5,005,000 and annual tax payable under CHF 103,000. Also: non-profit organizations, sports clubs, and charitable foundations can use it regardless of these limits.
Net tax rate vs. effective method
The effective method is worthwhile if you have high input VAT (e.g., you purchase many goods and services from VAT-registered Swiss companies). The net tax rate method is worthwhile if your input VAT is low (e.g., you mainly sell your own services and have few material expenses). In practice, the net tax rate is often not just simpler but also cheaper for service providers.
Accurate as of: The rates and amounts mentioned in this article reflect the state as of 6 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
- Can I switch between the net tax rate and effective method?
- You must use the chosen method for at least one tax period (usually one year). Switching is possible, but the decision should be well-considered — consult the FTA guidelines for deadlines.
- Can I still use the net tax rate if I also export services?
- Yes, but export revenue is excluded from the net tax rate — it's calculated at 0% (zero-rated). The net tax rate only applies to domestic revenue. This is actually an advantage: you earn the full rate on domestic revenue without tracking input VAT, and your export business gets the zero rate.