On November 2, 2021, the Swiss Federal Tax Administration (FTA) published a draft of the practice determination in which the approach for the lump-sum calculation of private share on business vehicles is to be increased from 0.8% to 0.9% of the purchase price, also for VAT purposes. The adjustment is to take place as early as 01.01.2022.

The most important points at a glance

• For several years already, the private share for the use of a business vehicle can be taken into account by means of a lump sum. With the introduction of the limitation of travel expenses in the course of FABI, the commute to work was no longer qualified as a business trip, which meant that the use of the business vehicle for the commute to work had to be taxed as additional income in the direct taxes. In the area of direct taxes, it was decided earlier in the year to qualify the commute to work as business-related again as of 1.1.2022 and to increase the monthly flat rate to 0.9% for this purpose. With the present draft amendment to the practice, this change is also to be made in the area of value added tax.
• As a rule, the corresponding value is determined as a lump sum on the basis of the purchase price of the vehicle (excl. VAT). The relevant approach is currently 0.8% per month; the percentage approach is to be increased to 0.9% per month as of 01.01.2022.
• However, the amount per month must be at least CHF 150.00.
• The lump sum determination of the private share is only permitted if the business use of the vehicle is predominant, i.e. more than 50%. Otherwise, the calculation of the private use must be made according to the effective method.