Invoice “including VAT”: the mandatory details under the VAT Act

What an invoice must contain under Art. 26 VAT Act

VAT is value added tax. The Value Added Tax Act (VAT Act) sets out what belongs on an invoice.

First, what is an invoice at all? An invoice is any document used to settle the consideration for a supply with a third party, whatever the document is called in business transactions.[3] A receipt or a fee note can therefore also be an invoice.

On request, you must issue your customer with an invoice that satisfies the legal requirements. It must clearly identify you, your customer and the nature of the supply, and as a rule contain the following elements:[1]

• your name and location, in the form you use in business transactions, a note that you are registered as a taxable person, and your number in the Register of Taxable Persons[1]
• the name and location of the customer, in the form they use in business transactions[1]
• the date or period of the supply, if it differs from the invoice date[1]
• the nature, object and extent of the supply[1]
• the consideration for the supply, that is, the price[1]
• the applicable tax rate and the tax amount payable[1]

There is an easier rule for receipts. On receipts issued by automatic tills, information on the customer need not be included, provided the amount does not exceed a limit laid down by the Federal Council.[1]

The form is free. For VAT purposes, paper invoices and electronic or digital invoices, such as a PDF invoice or a scanned paper invoice, are treated alike.[5]

Why “including VAT” alone is not enough

Many businesses state only a final price and add “incl. VAT”. The law allows final prices. But it requires one more detail: if the consideration includes the tax, stating the applicable tax rate is enough.[1]

So the rate is mandatory even with a final price. Without it, your customer does not know how much tax is in the price. They cannot work out the tax portion themselves.

The note has a second side. Persons not entered in the Register of Taxable Persons, or who use the notification procedure according to Article 38, may not include VAT details on invoices.[1] If you are not registered, “including VAT” does not belong on your invoice at all.

Stating the tax rate or tax amount correctly

You have two options. Both rest on the same rule.

Price excluding tax. You state the net price, the rate and the tax amount. What is required is the applicable tax rate and the tax amount payable on the consideration.[1]

Price including tax. You state the final price and the rate. In this case, stating the applicable tax rate is enough.[1]

The Swiss Federal Tax Administration (ESTV) illustrates the first option with a sample. Its 2024 sample invoice with a single tax rate and open disclosure shows CHF 5'500.00 for a copier, 8.1% VAT of CHF 445.50 and a total of CHF 5'945.50.[5]

Calculate precisely. An amount that is too high costs you money. If you detail too high a tax for a supply, you owe the tax detailed, unless the invoice is corrected or you show probable cause that the Confederation has not suffered a loss of tax.[1]

Consequences for the recipient’s input tax deduction

Input tax is the VAT a business pays on its purchases. If it is a taxable person, it may deduct this tax. In the course of their business activity, taxable persons may deduct the domestic tax invoiced to them as input tax.[1]

When is the tax deemed to be invoiced? When it is recognisable to the customer that the supplier has demanded payment of the VAT from them.[2] A clear invoice with the rate and, where necessary, the amount makes exactly that recognisable.

Your customer does not have to check everything. They do not have to verify whether the VAT was rightly demanded. However, if they know that the person who passed on the tax is not registered as a taxable person, an input tax deduction is not permitted.[2] That is why the register note and your number belong on every invoice.

Proof of payment is also needed. Deduction of the input tax is permissible if the taxable person proves that they have paid the input tax.[1]

If something is missing or a rate is wrong, you correct the invoice. An invoice may be subsequently corrected within the period permitted by commercial law by a document requiring acknowledgement of receipt, which refers to and revokes the original invoice.[1] How input tax then flows into your return is explained on the page on the VAT return.

Special case: resellers and margin taxation

A separate rule applies to trading in collectors’ items. If a taxable person has acquired collectors’ items such as works of art, antiques and suchlike, they may deduct the purchase price from the selling price to calculate the tax, provided they have not deducted input tax from the purchase price (margin taxation).[1] Only the margin is taxed, that is, the difference between purchase and sale.

A person is deemed to be a reseller if they act for their own account or for the account of another on the basis of a purchase or sales commission agreement.[1] Antiques are moveable objects more than 100 years old. Collectors’ items also include in particular motor vehicles whose first entry into service was more than 30 years before the purchase.[4]

Here the rule on detailing tax is reversed. If the taxable person details the tax openly on the resale of collectors’ items, they must pay the tax and may neither apply margin taxation nor deduct the notional input tax.[2]

Notional input tax is a deduction without openly detailed tax. It is available if you acquire an individualisable moveable good for your business activity and no VAT is openly passed on to you. No notional input tax may be deducted for goods subject to margin taxation.[1]

Checklist for your invoice template

Check your template once against these points. They follow the elements an invoice must as a rule contain.[1]

1. Your name and location, in the form you use in business transactions
2. Note on your register entry and your VAT number
3. Name and location of your customer
4. Date or period of the supply, if it differs from the invoice date
5. Nature, object and extent of the supply
6. Price of the supply
7. Tax rate and tax amount, and for a final price at least the tax rate
8. For collectors’ items under margin taxation: no open tax details

How to turn this into an invoice with a payment slip is shown on the page on invoices with a QR payment slip.