Invoicing without VAT: the correct notice and the most common mistakes

Many self-employed people in Switzerland invoice without VAT – perfectly legal as long as they stay below the threshold. The devil is in the details: a wrong or missing notice irritates clients, and VAT charged without registration becomes genuinely expensive. Here is the summary of the rules.

When you do not charge VAT

You are not VAT-registered if your worldwide annual turnover stays below CHF 100,000 (Art. 10 para. 2 lit. a VAT Act) and you have not registered voluntarily. In that case:

• You show no VAT and no VAT number.
• You cannot deduct input tax.
• You simply bill your net price – done.

Important for newcomers: the decisive factor is the expected turnover of the current calendar year (plus, where applicable, the previous year's). Once you reach or clearly exceed CHF 100,000, you must register with the FTA within 30 days and charge VAT from then on. The full procedure is described in our article VAT for freelancers.

The recommended notice on the invoice

There is no legal obligation for non-liable businesses – but the notice answers the question clients and their accountants will otherwise ask: why is there no VAT on this invoice? One line below the total has proven itself:

"VAT is not charged, as the supplier is exempt from VAT liability under Art. 10 para. 2 of the Swiss VAT Act."

Shorter and equally common: "Exempt from VAT (Art. 10 para. 2 VAT Act)." The notice looks professional and prevents back-and-forth questions.

Three mistakes that really cost money

1. Charging VAT without registration. Anyone not registered who still writes 8.1 % on the invoice owes that amount to the FTA – without being able to recover it from sales. The money is effectively lost. Never charge VAT without a valid VAT number (CHE number with "VAT" suffix).
2. Crossing the threshold and continuing without VAT. Once liable, the tax debt arises with each invoice issued. Late registration risks back payments plus interest. Monitor your turnover and submit the registration 30 days after crossing the threshold.
3. Deducting input tax without registration. Only VAT-registered businesses can. Keep your receipts anyway – for the period after registration.

Pricing: calculate with or without VAT?

When approaching the threshold, plan the switch in your pricing strategy:

• Private customers feel the VAT directly: CHF 1,000 becomes CHF 1,081. To stay competitive, you may have to absorb part of it.
• Business customers are usually VAT-registered themselves – the switch is largely neutral for them.

As an intermediate step, examine the flat-rate scheme (for many service providers 5.7 % instead of 8.1 % of turnover), which radically simplifies accounting. The mechanism is explained (in German) on buchhaltung-für-selbständige.ch: the flat-rate tax method in Switzerland.

Creating an invoice without VAT in practice

With the QR invoice generator you create invoices with or without VAT: simply leave the VAT option off – the additional text field is ideal for the exemption notice. Free Word and Excel templates are available on rechnungslösungen.ch: Swiss invoice templates.

Note: this article is not tax advice.