Flat tax rate method from 1 January 2025

From 1 January 2025, relevant changes take effect for companies that report their VAT using the flat tax rate method. These adjustments concern in particular the change of reporting method, input tax corrections and applications for additional flat tax rates.

26 January 2026 by Rodolfo Intaglietta

Last updated: 13 October 2026

VAT

Switzerland

4 min

What’s new Key points Tax rates What is abolished Implementation FAQ Conclusion

About the author

A competent tax advisor stands in a modern fiduciary office, ready to provide client-focused advice.

Rodolfo Intaglietta

Managing Director | CEO

Rodolfo Intaglietta is the founder and managing director of ONE! Treuhand GmbH. As a Treuhänder mit eidg. Fachausweis (Swiss fiduciary with Federal Diploma of Higher Education) and Diplomierter Experte in Rechnungslegung und Controlling (Expert in Accounting and Controlling with Advanced Federal Diploma of Higher Education), he supports entrepreneurs throughout Switzerland with clear figures, digital processes and personal advice on an equal footing.

The qualification “eidg. diplomierter Experte in Rechnungslegung und Controlling” corresponds to qualification level NQF 8 and is therefore at the highest level of education, comparable to a doctorate in terms of professional depth and responsibility.

Key facts about this article

Summary

From 1 January 2025, changes apply to companies that report their VAT using the flat tax rate method. They concern in particular corrections when changing the reporting method, the review of the flat tax rates, the abolition of special procedures and applications for additional flat tax rates.

What does this mean?

What this means:

From 2025, companies must adapt their VAT return to new formal requirements.
A change of method can lead to input tax corrections with an immediate financial effect.
Errors when changing the reporting method can lead to repayment claims or the loss of input tax entitlements.
The abolition of special procedures fundamentally changes established reporting processes.
Additional flat tax rates increase flexibility but require clean accounting.
ESTV deadlines and formal requirements become considerably more relevant from 2025.

What you should do now

Your to-dos:

Check whether your current activities are still reported correctly with the new flat tax rates.
Analyze early on whether changing the reporting method makes sense from a tax perspective.
Plan input tax corrections for a change of method (code 415 or 410) in good time.
A change of reporting method must be notified by 28 February of the year from which it is to apply: for 2027, by 28 February 2027.
Make sure that different activities with different flat tax rates are booked separately.
Remove procedures that are no longer permitted from 2025 from your VAT processes.

Tools you need:

VAT return with access to codes 410 and 415
Accounting software that can separate activities by tax rate
Access to the ESTV contact form
Declaration of submission to the flat tax rate method
Current ESTV publications on VAT from 2025 (PDF)
Internal documentation of services, activities and turnover

What changes with the flat tax rate method?

The flat tax rate method is a simplified procedure for public authorities and related institutions such as schools, hospitals and public transport companies. Unlike the net tax rate method, there is no upper turnover limit.

From 1 January 2025, relevant changes take effect for companies that report their VAT using the flat tax rate method.

These adjustments concern in particular the change of reporting method, input tax corrections and applications for additional flat tax rates.

The most important changes at a glance

Corrections when changing the reporting method

From the effective method to the flat tax rate method: Companies must correct the input tax previously deducted on the current value of goods and services and repay it to the ESTV. This correction is made under code 415 in the last VAT return before the change.

From the flat tax rate method to the effective method: Companies can claim the input tax on the current value of the goods and services available at the time of the change. The correction is made under code 410 in the first VAT return after the change.

Important: a change is only possible after a full tax period.

Review of the flat tax rates

The ESTV reviewed and redefined the flat tax rates as of 1 January 2025; the applicable rates for each activity are listed in VAT Info 13. Unlike the net tax rate method, the flat tax rate method has neither a turnover limit nor a tax liability limit (Art. 97 para. 2 MWSTV). The adjusted rates are shown automatically in the VAT returns. Companies do not need to do anything.

Abolition of special procedures

From 2025, certain procedures will no longer be applied. These include:

export supplies (Form 1050),
crediting of notional input tax (Form 1055),
margin taxation (Form 1056).

Applying for additional flat tax rates

For activities that require an additional flat tax rate, this rate can now be applied for and declared directly in the VAT return. The ESTV reviews and approves it afterwards.

Companies should make sure that different activities and services are recorded separately in the accounts according to their flat tax rates.

Practical implementation: what do companies need to do now?

Check the effects: companies should analyze the new flat tax rates and the changes and make sure their accounting is ready to separate the different activities.
Notify a change of reporting method: change from the flat tax rate method to the effective method: notify the ESTV of this change via the contact form by 28 February of the year from which it is to apply.
Change from the effective method to the flat tax rate method: submit the declaration of submission to the ESTV for review.
Adapt your accounting: all activities that require different flat tax rates must be recorded clearly and separately. Complete documentation makes later declaration and audits easier.

Your questions answered

What changes when switching from the effective method to the flat tax rate method?

When switching to the flat tax rate method, companies must correct the input tax previously claimed on the current value of the existing goods and services and repay it to the ESTV. This is done under code 415 in the last VAT return before the switch. A switch is possible at the earliest after a full tax period.

What applies when switching from the flat tax rate method to the effective method?

When switching to the effective method, companies can claim the input tax on the current value of the existing goods and services. This correction is made under code 410 in the first VAT return after the switch. This switch, too, is only possible after a full tax period.

Which special procedures are abolished from 1 January 2025?

From 2025, the previous procedures no longer apply for:

export supplies (Form 1050),
crediting of notional input tax (Form 1055),
margin taxation (Form 1056).

Companies must integrate these changes into their reporting processes and adjust their VAT return accordingly.

How can I apply for additional flat tax rates?

If an additional flat tax rate is required for certain activities, it can be applied for and declared directly in the VAT return from 1 January 2025. The ESTV reviews and approves it afterwards. Companies must make sure that all activities are recorded separately in the accounts.

What do I need to do to change the reporting method?

Change from the flat tax rate method to the effective method: Notify the ESTV of the change via its contact form by 28 February of the year from which it is to apply.

Change from the effective method to the flat tax rate method: Submit the declaration of submission to the flat tax rate method to the ESTV for review.

In both cases, the corresponding corrections must be made in the last or first VAT return respectively.

Sources

Further information and the legal basis can be found here:

Mehrwertsteuerverordung mit Änderungen ab 2025 (PDF)

Eidgenössische Steuerverwaltung ESTV, Änderungen bei der MWST ab 1. Januar 2025, Pauschalsteuersatzmethode

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