Annual VAT reconciliation in Switzerland: checks, corrections and deadlines

What is annual VAT reconciliation?

Known as concordance annuelle TVA in French, this is the year-end comparison between the VAT returns already filed and the underlying annual accounts. It concerns VAT-registered businesses, including small businesses. The work must cover revenue, deductible input tax where relevant, and transactions such as purchases of services from abroad.

A difference is not automatically an error. Outstanding invoices, customer advances, foreign transactions, disposals of fixed assets and closing adjustments can explain legitimate differences. Accounting software can help, but it cannot replace a review of VAT treatment and supporting documents.

180 days or 240 days: which deadline applies?

Article 72 of the Swiss VAT Act requires errors identified when preparing the annual accounts to be corrected no later than the return for the reporting period in which the 180th day after the financial year-end falls. Plan the reconciliation within that 180-day review window.

The FTA describes a finalisation period of 240 days after the relevant year-end: the 180-day review milestone plus the usual 60-day submission period. If no annual correction arrives within that period, it assumes the returns are complete and correct. Check the actual calendar and reporting arrangements for your business.

These are different stages, not competing deadlines. The 240-day reference is not permission to postpone correcting an error you already know about. An extension for your income or corporate tax return does not automatically extend a VAT deadline.

Preparation checklist: collect the right records

• Final annual accounts, trial balance and general ledger, including closing entries.
• Every VAT return filed for the year and any corrections already submitted.
• The VAT code list and a mapping of revenue and input-tax accounts.
• Opening and closing customer and supplier balances, advances and credit notes.
• Sales and purchase invoices, customs import-tax documents and records of acquisition tax.
• Details of private use, mixed activities, fixed-asset disposals and other unusual transactions.

Confirm whether you use the effective method or the net tax rate method, and whether you account for VAT on invoiced amounts or payments received. These choices change the reconciliation. Start with a completed year-end accounting checklist.

Reconcile turnover and explain timing differences

Compare the revenue in the accounts with the totals declared in the VAT returns. Include relevant transactions outside ordinary sales, such as asset disposals. Separate taxable supplies, exempt supplies, excluded supplies and supplies whose place of taxation is abroad; each category has a different VAT treatment.

Under cash-basis reporting, an unpaid customer invoice can be recognised in the accounts without yet belonging in VAT turnover. Build a bridge using opening and closing receivables, credit notes and advances instead of assuming the difference is undeclared sales.

Example: CHF 10,000 of omitted sales

A business using the effective method and invoice-basis reporting declared CHF 490,000 of net taxable turnover. Its final accounts show CHF 500,000. The unexplained CHF 10,000 is a sale subject to 8.1% VAT: the additional output tax is CHF 810. The correction reports the CHF 10,000 difference and the resulting tax, not the full CHF 500,000 again.

Check input VAT and acquisition tax

Under the effective method, check the entitlement to each input-tax deduction, the supporting invoice and the allocation to taxable business activity. Review private use, mixed activities, required reductions, investments, imports and supplier credit notes. A deductible expense for direct-tax purposes does not automatically give a right to deduct VAT.

Under the net tax rate method, ordinary input VAT is not deducted separately in the same way. Apply the rules for that method rather than copying an effective-method reconciliation.

Review services purchased from abroad and other transactions subject to Swiss acquisition tax. Check both the tax due and any permitted deduction.

Example: two corrections, CHF 1,215 payable

In addition to the CHF 810 output-tax shortfall above, the business finds CHF 405 of input VAT deducted without entitlement. The total additional tax is CHF 1,215. Show the turnover/output-tax correction and the input-tax correction in their respective fields, with separate calculations.

Submit the right correction and keep the evidence

For errors found through annual reconciliation, use the FTA portal’s annual reconciliation form: Concordance annuelle — décompte rectificatif conformément à l’art. 72 LTVA. Enter only differences against returns already filed. A correction to an individual monthly, quarterly or half-yearly return uses the correction for that reporting period.

Deduct corrections already submitted from your reconciliation so that the same amount is not reported twice. If the annual check finds no error, no annual correction form is required, but retain the reconciliation evidence. A correction can also identify overpaid VAT or an admissible deduction omitted previously.

Keep the submitted form, filing receipt, calculations, supporting documents and payment evidence. Submitting a correction does not itself pay the amount owed. Calling the annual reconciliation a “fifth return” is only shorthand and is misleading for businesses that do not file quarterly.

Interest, records and a final review

A late correction resulting in additional VAT can attract default interest. Use the rate applicable to the relevant period; do not assume a fixed 4% rate for every year. The FTA generally does not levy default interest when the calculated amount is below CHF 100, subject to the applicable rules.

Retain accounting and VAT evidence for the applicable statutory period, generally ten years. Certain real-estate VAT records require twenty years, and records may need to be kept longer where relevant limitation periods have not expired. A five-year retention policy is not sufficient.

• All account-to-return differences explained.
• VAT method and invoice/cash timing applied consistently.
• Input tax and acquisition tax checked.
• Previously filed corrections excluded from the new correction.
• Correction, payment and supporting file completed before the applicable deadlines.

Frequently asked questions