With a standard rate of 7.6% (flanked by a reduced rate of 2.4% for basic necessities and a special rate of 3.6% for services in the accommodation sector), the rate applied in Switzerland is low if compared to other countries. Taking into account the minimum rate of 15% prescribed by the EU, the burden imposed on consumers in our country is therefore only half that which they experience in the more moderate EU states.

Standard rates can indeed reach 25% (see graph 1). It goes without saying that there are also operations within the EU that are excluded from the scope of tax, and therefore a hidden tax that penalizes companies. In addition, for cross-border trade in services, the criteria for applying VAT can sometimes vary between Switzerland and the EU, which is likely to result here and there by an accumulation of the tax. The low rate of VAT practiced in Switzerland is a real comparative advantage for its companies and favors certain services. Finally, all end consumers are better off in Switzerland than in the EU.

• VAT: an expensive and risky tax

After several attempts, which failed in a popular vote, the Federal Council put into force in 1995 an ordinance governing VAT, which was replaced in 2001 by the federal law on VAT. Very soon after its entry into force, companies realized that in practice it was a complicated tax. For its part, the administration had to ensure that this tax, levied according to the self-taxation system, could be applied by companies in the direction desired by the legislator. This entailed incessant explanatory work on his part, marked by the sending of a great deal of legal information and the publication of a long list of directives (brochures by branch of activity, notices, etc.). At present the tax issues can be handled well and using the business calculator comes quite important.

• A whole procession of tedious requirements for both sides therefore accompanied the introduction of VAT. Since then, more than 10 years have passed and the levying of this consumption tax is still a big challenge for many companies. Apart from the frustration caused by the complexity of VAT and the unilateral interpretation of the rules by the tax authorities, it is also and above all the sometimes extremely formalistic attitude that the authorities may have had, until recently. tax audit, which explains the widespread dissatisfaction with this tax.

VAT is not only seen as complicated in its levy; it is also considered risky because of the danger of tax write-backs that it entails in the event of incomplete application. Companies are therefore obliged to seek to minimize this risk by incurring significant expenditure on consultation and verification. This is why, in particular, VAT is a tax the collection of which usually entails considerable costs.