VAT (Switzerland)

Swiss VAT (Taxe sur la valeur ajoutée — TVA/MWST) is levied by the Confederation at a standard rate of 8.1% (since January 2024), with a reduced rate of 2.6% for food, medicines and books, and a special rate of 3.8% for accommodation. Companies with annual revenues exceeding CHF 100,000 must register for VAT. In financial due diligence, VAT compliance is systematically verified — VAT reassessments constitute significant fiscal liabilities. In transaction structuring, the VAT treatment of an acquisition (subject or exempt) can have material economic impacts on the effective transaction cost.

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Example: due diligence on a Swiss services company identifies CHF 185,000 of VAT not invoiced on international services incorrectly treated as exempt. This potential VAT liability — exposing the company to a tax reassessment with interest and penalties — is integrated in the SPA warranty scope and in the adjusted net debt definition, directly reducing the equity consideration paid to selling shareholders.

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Hectelion verifies VAT compliance in every Swiss due diligence, identifying reassessment risks and integrating them in SPA warranties and net debt adjustments.