Does a European SME need to register for Swiss VAT to invoice a Geneva-based client?

For B2B services, the place of supply principle applies (Art. 8 VAT Act). The European SME invoices without VAT. The Swiss company declares the acquisition tax. However, if the European company generates more than CHF 100,000 in global turnover and performs certain specific services in Switzerland (e.g., work on real estate), registration for Swiss VAT becomes mandatory.

How do I account for an invoice issued in a foreign currency?

The invoice must be recorded in your accounting (kept in your local currency) at the exchange rate on the day of invoicing or the monthly rate published by the Tax Administration. Upon payment, the difference between this historical rate and the actual collection rate generates an accounting entry for 'Exchange Gain' or 'Exchange Loss'.

Why avoid receiving Swiss Francs into a Euro account?

Your European bank will impose its own conversion rate (the 'banknote' rate or a very unfavorable currency rate) including a hidden exchange margin ranging from 1.5% to 3%, in addition to potential non-Euro SEPA receipt fees. This directly impacts your net profit margin.

Cross-border B2B Invoicing (CH-EU): Accounting and Tax Guide

Note to CFOs and Executives

Trade between Switzerland and the European Union requires particular diligence. Whether it is a Swiss SME invoicing a French company, or a German agency invoicing a Geneva-based client, three pillars must be mastered: the correct application of VAT (place of supply), multi-currency accounting entries, and protecting the profit margin against exchange rate risk.

Working internationally offers tremendous growth drivers. However, the monetary and fiscal border between Switzerland (non-EU) and the European Union generates administrative complexity that is often underestimated. This guide details the tax obligations, accounting entries, and solutions to prevent your margins from being eroded by bank fees.

1. Taxation: VAT rules applicable to B2B services

The golden rule for providing international B2B services is the place of destination principle. Here is how it applies depending on your situation:

Scenario A: An EU company invoices a Swiss client

According to Article 8 para. 1 of the Federal Act on Value Added Tax (VAT Act), the place of supply is deemed to be where the recipient has the seat of its economic activity.

The European company (e.g., France) issues an invoice excluding VAT (0%).
It must include the statement: "Intra-community provision of services / outside the scope of VAT - Article 259 B of the CGI" (or European equivalent).
It is the Swiss company that must declare and pay the acquisition tax to the Federal Tax Administration (FTA).

Important exception: If the European company generates a global turnover of more than CHF 100,000 and performs certain specific services in Switzerland (work related to real estate in Switzerland), it may have to register for Swiss VAT.

Scenario B: A Swiss SME invoices an EU client

The logic is reversed under European VAT directives.

The Swiss company invoices excluding tax without applying Swiss VAT (0%).
The invoice must bear a statement justifying the absence of VAT, for example: "Service subject to VAT in the country of the recipient (Reverse Charge)".
The European client will have to self-assess the VAT in their own country.

2. Accounting: Recording multi-currency invoices

Invoicing in a foreign currency (for example, a Lyon web agency invoicing in CHF, or a Lausanne fiduciary invoicing in EUR) raises an accounting challenge: the accounting is kept in the reference currency (EUR in France, CHF in Switzerland). There is therefore a time lag between the issuance of the invoice and its collection.

The issuance entry (Example of a Swiss SME invoicing 10,000 EUR)

On the day of issuance, the Swiss accountant must convert the amount into CHF to record it. They generally use the monthly rate published by the FTA (e.g., 1 EUR = 0.95 CHF).

Account (Swiss SME Plan)	Description	Debit (CHF)	Credit (CHF)
1100	Accounts Receivable (Debtors)	9,500.00
3400	Service Revenues (Sales)		9,500.00

The collection entry and the exchange difference

The client pays 30 days later. The rate has dropped to 1 EUR = 0.93 CHF. The Swiss company receives the equivalent of 9,300 CHF. It therefore incurs an exchange loss that it must recognize in the accounts.

Account	Description	Debit (CHF)	Credit (CHF)
1020	Bank	9,300.00
6940	Exchange Losses	200.00
1100	Accounts Receivable		9,500.00

An accounting exchange loss is not a market inevitability: it is very often aggravated by the bank!

3. Banking risk: the impact on your margins

In addition to natural market volatility, SMEs lose colossal sums every year due to traditional financial intermediaries.

If you are a European company receiving a transfer in Swiss Francs (CHF) to a Euro (EUR) account:

The sending or receiving bank may charge international transfer fees (often between 15 CHF and 40 CHF per transaction), as the transfer is not a standard domestic SEPA.
The receiving bank will force the conversion of CHF into EUR by applying its own commercial exchange rate, which includes a hidden margin (spread) generally oscillating between 1.5% and 3% compared to the interbank market rate.

On an invoice of 20,000 CHF, this simple "hidden bank margin" slashes the turnover by approximately 400 to 600 Euros. This is a financial burden that adds no value to the business.

The ibani solution: Localize collections

The best B2B strategy is to offer local invoicing for the client, while ensuring optimized repatriation. ibani offers a tailor-made infrastructure for businesses:

Named collection accounts (IBAN): If you are in Europe, we assign you a CH (Swiss) IBAN. Your Swiss client pays you in CHF, via a local transfer, free and without exchange rate risk for them.
Elimination of abusive margins: Upon receipt of funds, ibani converts them by applying the true live exchange rate, subject to a minimal and transparent commission.
Automated repatriation: The converted funds are sent the same day to your company's main bank account (in EUR).
Accounting transparency: Each conversion is documented with a detailed transaction notice, allowing your fiduciary or accountant to perfectly reconcile the invoices.