01What Is the Flat Tax Rate Method?
Value added tax in Switzerland is normally calculated on the difference between your revenue and your input taxes -- this is called the effective method. The flat tax rate method (Saldosteuersatz) is a simplified alternative where you pay a predefined percentage of your revenue to the FTA (Federal Tax Administration).
Instead of offsetting every individual input tax, you pay a fixed, industry-specific rate. This rate is already calculated to take into account the average input taxes for your industry.
02Who Can Use the Flat Tax Rate Method?
The method is not available to everyone. The FTA sets clear conditions:
- Your annual revenue does not exceed CHF 5.02 million
- The annual VAT liability does not exceed CHF 109,000
- You have been subject to VAT for at least one year
- A defined flat tax rate exists for your field of activity
The prerequisite is, of course, that you meet the VAT obligation from CHF 100,000. If you meet the conditions, you must apply for the method with the FTA. Once approved, you are bound to it for at least one year.
03How Is VAT Calculated?
The calculation is considerably simpler than with the effective method. You only need your gross revenue (incl. VAT) and your flat tax rate:
Formula: VAT liability = Gross revenue x Flat tax rate. Example: Web designer, revenue CHF 80,000 gross -- VAT liability = CHF 80,000 x 5.9% = CHF 4,720.
The return filed with the FTA is semi-annual -- you report your revenue and pay the calculated amount. No collection of input taxes, no complicated bookkeeping.
04Flat Tax Rate vs. Effective Method
Both methods have their merits. Here is a direct comparison:
| Criterion | Flat tax rate method | Effective method |
|---|---|---|
| Effort | Very low | Medium to high |
| Claim input taxes | Not possible | Yes, fully |
| Filing | Semi-annually | Quarterly |
| Advantage with high material/goods costs | No | Yes |
| Advantage for services | Often yes | Situation-dependent |
| Binding period | 1 year minimum | Flexible |
05Key Flat Tax Rates for 2026
The FTA has defined a specific rate for all common industries. Here are the most relevant ones for Swiss self-employed professionals:
| Industry / Activity | Flat tax rate |
|---|---|
| Management consulting, coaching, fiduciary | 5.9% |
| IT, web development, software development | 5.9% |
| Architect, engineer, planner | 5.9% |
| Graphic design, advertising, marketing | 5.9% |
| Photographer, cameraman | 4.4% |
| Therapist, physiotherapist | 2.0% |
| Electrician, plumber, trades | 3.7% -- 5.2% |
| Restaurants, cafes | 5.1% |
06Concrete Calculation Example
Suppose you are a self-employed consultant with CHF 120,000 annual revenue (excl. VAT). Here is how the two methods compare:
Scenario A -- Flat tax rate (5.9%): Revenue excl. VAT: CHF 120,000. VAT on invoices (8.1%): +CHF 9,720. Gross revenue: CHF 129,720. VAT liability (5.9%): -CHF 7,653. Retained VAT difference: +CHF 2,067.
Scenario B -- Effective method: VAT collected (8.1%): CHF 9,720. Input tax (e.g. CHF 15,000 costs x 8.1%): -CHF 1,215. VAT liability: -CHF 8,505.
In this example, the flat tax rate method is more favourable -- you keep CHF 2,067 more. You can find a detailed practical example with einzly in our separate article. The higher your deductible input taxes are (office equipment, material costs, rent), the more likely the effective method becomes worthwhile.