What businesses need to know The Swiss Confederation is planning to adjust the VAT rates as of 1 January 2024. This change will have significant…
What businesses need to know As of 1 January 2024, the Swiss Confederation is planning to adjust the VAT rates. This change will have significant implications for businesses in Switzerland and requires timely preparation to ensure a smooth transition. Planned changes to the VAT rates According to the Swiss Federal Tax Administration (FTA), the following changes to the VAT rates are planned as of 1 January 2024: Rate Standard rate Reduced rate Special rate for accommodation Until 31 December 2023 7.7 % 2.5 % 3.7 % New as of 1 January 2024 8.1 % 2.6 % 3.8 % Preparing for the changes To successfully implement the changes to the VAT rates, businesses should begin planning in good time. The VAT codes must be updated in Microsoft Dynamics 365 Finance before the new rates take effect, to ensure that the correct tax rates are applied and that compliance with tax regulations is guaranteed. The tax rate increase should be correctly recorded in the VAT code values. This also ensures that, in the spirit of the tax authority, services spanning multiple periods can be invoiced correctly and traceably. The % values of the VAT codes The various VAT rates by period Services spanning multiple periods In some industries, services are frequently provided over longer periods that extend beyond the year-end. For example, annual contracts such as maintenance contracts, telecommunications contracts, subscriptions to magazines and newspapers, but also services spanning multiple periods such as rents. When such contracts are concluded, the invoices must split the consideration for the period before and after 1 January 2024 and state the corresponding tax rates. Otherwise, the taxable person would have to invoice the entire service at the higher tax rate. In the VAT return for the 3rd quarter, or rather the month of July 2023, the new tax rates can be declared for the first time. Under Tax -> Setup -> General ledger parameters in the VAT section, the type of the calculation date must be