VAT and deduction of input tax

Value added tax and input tax are not always easy to calculate. Here is a guide using a concrete example.

The added value chain from import of fabric to the manufacture of clothing to the store (all values in CHF):

The importer sells fabric to the clothing factory (example: if the value of the imported goods is CHF 5,000, a VAT of CHF 400 is invoiced).	Market value	10,000
	+ 7.7% VAT	770
	Invoice amount	10,770
Importer’s VAT declaration	Total VAT	770
less input tax		- 385
The importer pays VAT		385

The clothing factory makes the clothes and delivers them to the store	Market value	30,000
	+ 7.7% VAT	2,310
	Invoice amount	32,310
VAT declaration of the clothing factory	Total VAT	2,400
less input tax		- 770
The clothing factory must pay VAT in the amount of		1,540

The store sells clothes to the customers	Market value	70'000
	+ 7.7% VAT	5'390
	Invoice amount	75'390
Store’s VAT declaration	Total VAT	5'600
less input tax		- 2'310
The store must pay VAT in the amount of		3'080

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Last modification 27.02.2020