Value Added Tax (VAT) in Switzerland
Swiss Value Added Tax is an indirect tax levied by the federal government. Why does Switzerland need a value added tax? The basic concept is simple: It ensures that each consumer supports the government financially. To simplify matters by not having each consumer report taxes owed on his/her consumption individually, companies have to pay this tax. They pass it on to consumers in the form of value added tax that is included in the purchase price. What exactly is the tax base? According to the Swiss Federal Tax Administration (ESTV, Swiss Internal Revenue Service) «The tax targets all goods and services provided in Switzerland for compensation and that are not subject to a statutory exbillinemption.»