01What Is Reverse Charge VAT?
When you purchase services from abroad as a Swiss business, VAT is generally due. Unlike physical goods, which are taxed at customs (import tax), there is no customs checkpoint for services. Instead, the reverse charge principle applies: you as the buyer are responsible for declaring and paying the VAT yourself.
This self-assessment is called Bezugsteuer (reverse charge tax). It typically applies to digital services such as software subscriptions, cloud hosting, online advertising or design tools — i.e. everything you purchase from providers like Adobe, Canva, Google or Amazon Web Services.
02The CHF 10,000 Threshold
The key question is: how much do you spend per year on foreign services? There is a clear threshold:
- Under CHF 10,000 per year: No reverse charge VAT owed. You don't need to declare anything.
- Over CHF 10,000 per year: You owe 8.1% VAT on the entire amount — retroactively from the first franc, not just the amount exceeding CHF 10,000.
This threshold applies regardless of whether you are VAT-registered or not. It refers exclusively to the total amount of all services purchased from abroad within a calendar year.
03Typical Examples
Many self-employed professionals use foreign services daily without thinking about reverse charge VAT. Here's an overview of common software subscriptions and their approximate annual costs:
| Service | Country of Origin | Approx. Annual Cost |
|---|---|---|
| Adobe Creative Cloud | Ireland (EU) | CHF 720 |
| Canva Pro | Australia | CHF 180 |
| Google Workspace | Ireland (EU) | CHF 250 |
| AWS / Cloud Hosting | USA | CHF 500–5,000 |
| Zoom Pro | USA | CHF 200 |
| Figma | USA | CHF 180 |
| Slack | USA | CHF 100 |
In the example above (without heavy cloud hosting), the total comes to around CHF 2,130 per year — well below the CHF 10,000 threshold. In this case, no reverse charge VAT is owed.
04When Does It Become Relevant?
For most sole proprietorships, reverse charge VAT remains irrelevant. However, there are scenarios where you might exceed the CHF 10,000 threshold:
- High cloud costs: If you use AWS, Azure or Google Cloud intensively, costs can quickly run into the thousands.
- Online advertising: Google Ads or Meta Ads are billed from abroad depending on the company's registered office. With larger budgets, this adds up fast.
- Many SaaS tools: If you use dozens of tools simultaneously (project management, CRM, analytics, email marketing, etc.), you may approach the threshold.
If you notice you're approaching the CHF 10,000 threshold, you should actively track your spending on foreign services — ideally with accounting software.
05Declaration and Settlement
If you exceed the threshold, you must declare the reverse charge VAT. This is done as part of your VAT return to the FTA. How this works in detail depends on whether you are already VAT-registered:
You declare the reverse charge VAT in your regular VAT return under 'Acquisition of services from abroad'. If you use the effective method with input tax deduction, you can simultaneously claim the reverse charge VAT as input tax — the net effect is then zero.
If you are not VAT-registered but exceed CHF 10,000, you must register with the FTA specifically for reverse charge VAT. You will then receive a separate filing obligation for the reverse charge tax.