Supplies from public authorities derived from entrepreneurial activities are liable to VAT.

Independent services from public authorities: taxable entities

Along with public law institutions, the autonomous agencies of the Confederation, cantons and communes are considered as the taxable persons of public authorities. It should be noted that establishments which are legally dependent on public authorities, such as public transport systems, industrial services and communal areas are also considered as taxable entities.

These agencies may combine to form one single taxable entity. To do so, the services in question must proceed to combination prior to the beginning of the tax period and must retain combined status for one tax year.

Liability of public authorities: implementation procedures

The amendments to the VAT Act, in force as of 1st January 2018, provide for substantial modifications regarding the liability conditions for public authorities and their taxable entities. Indeed, as long as the turnover derived from taxable supplies provided by the taxable entity of a public authority to persons other than the public authority remains below CHF 100,000, the taxable entity in question will be exempt from tax liability.

Additionally, it should be noted that supplies provided between public authorities which are related by holding or foundations are also exempt from tax liability (Art. 21 para 2 ch 28 let c VAT Act; Art. 38 VAT Ordinance).

Finally, it should be noted that the provision of staff between two public authorities is henceforth an activity exempt from tax liability (Art. 21 para 2 ch 28 bis).

This VAT Act amendment implies important changes for public authorities, which must check whether or not they remain liable to VAT. This development accompanies further change in terms of a modification in VAT rates – notably flat rates – also applicable as of 1st January 2018.



> Liable to VAT if turnover generated from activity provided to persons other than the public authority exceeds CHF 25,000 AND if the turnover generated from all taxable supplies exceeds CHF 100,000 p.a.

FROM 01.01.2018:

> Liable to VAT if turnover generated from activity provided to persons other than the public authority exceeds CHF 100’000.

Public Authorities: impact of the reduction in VAT rate on flat rates

Public authorities may use the flat rate reporting method to calculate the amount of VAT due. This method is based on specific rates for each activity sector.

The amount of VAT due is found by multiplying the turnover – VAT included – by the flat rate corresponding to the activity sector. You can find a full list of activities concerned by the flat rate VAT reporting method in the document “info TVA 13 sur les taux forfaitaires” (

As of 1st January 2018, these flat rates have been lowered as a result of the rejection of the referendum of 24th September 2017. This adaptation of flat rates for public authorities has been accompanied by the creation of new activities targeted by the existing flat rates.

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