Procedures and requirement: invoicing in Switzerland in 2022

Invoicing requirements and procedures will depend on the goods and services sold, the value of the transaction, the type of recipient and the size of your company. Want to know the finer details of invoicing? Check out our guide!

When should I issue an invoice?

Definition of an invoice

A document that proves a purchase or a sale – an invoice provides all the information needed about a transaction. Its validity requires the express or tacit agreement of the signatories. But agreement on the essential points of the contract will suffice.

Good to know! A judge will handle any legal dispute concerning the secondary points of the invoice.

Requested by the recipient and provided by a supplier, invoices provide three key guarantees regarding:

• origin
• integrity
• authenticity.

Invoicing is not required where the supply of goods and services is for a value of less than CHF 400. A receipt without the details of the recipient will suffice. Over this amount, the accounting document can be legally submitted in various formats, such as:

• contract
• bill
• credit note
• ticket, coupon or till receipt (electronic or from a cash register).

Be careful! Some documents do not count as invoices, such as a:

• fax
• purchase order
• delivery note
• invoice log
• email
• invoices sent electronically

Also, photocopies and copies have limited rights. But the principle of full disclosure included in article 958F of “Part Five: The Swiss Code of Obligations” accords the same evidential weight to paper, electronic and digital invoices (by decision of the Swiss Federal Council). Swiss federal law supplementing the Swiss Civil Code specifies the importance of accounting documents assuring the link with the transaction and their retention for a minimum of ten years starting from the expiry of the financial year.

The role of invoices in the accounting system

Invoicing is central to every business’s accounting system.  For this reason – on top of the principle of full disclosure –  the accounting principle of regularity (as in article 957) exists. This stipulates that every invoiceable transaction should be:

• recorded completely, systematically and in a way that can be tracked;
• presented clearly and legibly;
• justified by accounting documentation
• fit for purpose given the size of the supplier business.

Invoices do not only track all of a company’s transactions but also (alongside other accounting documents) give an accurate illustration of its assets, financial situation and results.

Organizations involved

Although a recipient can request an invoice from a service provider, supplier or creditor; Swiss firms do not all operate under the same accounting system. Businesses with revenue of less than CHF 500,000 in the last financial year use a simplified accounting system that includes just their income, expenses and assets. This also applies to:

• clubs and foundations not registered with the Commercial Register;
• foundations exempt from having to appoint an auditor.

Businesses with a turnover over CHF 500,000 in the previous financial year must prepare a full set of accounts.

NB:  This measure applies in particular to businesses under sole proprietorship, partnerships and legal entities.

What information should be on an invoice?

Invoice essentials

Three of the elements required on an invoice are particularly important from a regulatory point of view.

Signature

Swiss law acknowledges advances in technology and allows the use of electronic signatures to validate invoices. Although this is not compulsory, it can facilitate the authentication and verification of all the information transmitted. The principle of full disclosure means it is a practical alternative to a paper signature. A signature (electronic or not) is essential to the business and looks to provide the best level of protection against any subsequent modifications to the terms of the contract which may not be identified. A signature is found on documents involving:

• the deduction of tax;
• the collection of tax;
• the recovery of taxes

Price

The consideration amount (supply of goods or services) is obviously shown on an invoice. Because invoicing can be international, it is important to know which currency (-ies) to use:

• Domestic consideration. If the transaction is carried out exclusively within Swiss borders, prices can be given in Swiss francs only.

• International consideration. If the recipient of the goods or service resides abroad, the total amount is given in Swiss francs but also converted into the customer’s original currency.

• International business partner. If your business is the recipient in a B2B transaction, amounts are given in the supplier’s currency and the total price must also be converted into Swiss francs.

Helpful tip: Currency conversions are usually done using the official exchange rate published by the Swiss Federal Customs Administration.

Other than bipartite transactions, business accounting generally uses the domestic currency or the currency most commonly used by the business. By default, invoices use one of the Swiss national languages (French, Italian or German), or if more practical, English.

Value Added Tax (VAT)

VAT in Switzerland will affect your pricing depending on your business. There are three types:

• Standard rate: 7.7%. Applied to most sales on things like cars, jewelry, alcohol and services.

• Special rate: 3.7%. Primarily applied to the accommodation and hotel sectors.

• Reduced rate: 2.5%. Applied to everyday consumer (edible), health (medicine) and cultural (books and newspapers) goods.

For more information on VAT in Switzerland, see our  guide on payment methods, rates and exemptions. As each case is unique you may also want to be advised by an approved exporter or the Swiss Federal Tax Administration (AFC).

Requesting an invoice

In addition to the requirement for businesses to keep authentic and complete accounts, any recipient of a service above CHF 400 has the right to request an invoice. Invoices can be created by the supplier or outsourced to a subcontractor. Responsibility for the authenticity of the document always rests with the supplier.

NB: As an accounting document, invoices confirm the deduction of any preliminary tax and can be addressed to a physical person or a legal entity.

In this context, the strict minimum is to indicate the supplier (contractor), the customer (recipient) and the service provided. Other mandatory details are as per article 26 of the Swiss Federal Law on VAT.

Invoice settlement

Invoiced can give a due date – the absence of a deadline implies that settlement may be requested immediately. In the event of a payment being overdue, article 104 of the Swiss Federal Law supplementing the Civil Code specifies that:

• Moratorium annual interest rate of 5% is to be paid by the debtor even where a lower rate of interest is stipulated by the contract.

• If the invoice specifies a rate (e.g. the B2B discount rate) above the 5% moratorium rate the higher rate will be observed.

Good to know: Invoices in Switzerland are paid on average within 10-30 days and more than two-thirds are settled within a month.

For specific cases, the AFC supplies further information to help you with your invoicing. AFC details: Administration fédérale des contributions Eigerstrasse 65 3003 Berne Téléphone : +41 58 46 271 06 In summary:

• Invoices demonstrate the authenticity of a consideration;

• Invoices only have legal value where both parties are in agreement (supplier and recipient);

• Invoices are mandatory for transactions above CHF400;

• Invoices can be prepared on paper or electronically (with respect to the principle of full disclosure);

• Invoices are prepared in the main currencies of both the supplier and the recipient;

• A variable VAT rate applies depending on what is being supplied;

• Invoices must be supplied on the request of the recipient;

• Overdue payment results in a minimum annual moratorium interest rate of 5%.