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Eligibility criteria

To qualify for the annual VAT reporting option, businesses must meet two key criteria. First, their annual turnover must not exceed CHF 5,005,000. Secondly, the business must have a clean VAT compliance history, meaning timely VAT filings and full payments for the last three periods. The Swiss Federal Tax Administration (SFTA) will verify compliance before granting approval. Businesses that wish to opt for the annual VAT reporting system must submit an application through the ePortal by February 28, 2025. New businesses, however, have 60 days from receiving their VAT number to apply.

Advance VAT payments

Under the new system, businesses will be required to make advance VAT payments. These payments, calculated by the SFTA, will be due in instalments on May 30, August 30, and November 30. For those using the net tax rate method, only the August 30 payment is required. These advance payments are based on an estimated tax liability and can be adjusted up to 10 days before the due date. However, if the advance payments are deemed insufficient—specifically if they are below 50% or 35% of the total tax claim—they may be considered inadequate, potentially leading to penalties.

Filing and payment

The annual VAT statement, which will include final VAT calculations, must be submitted and paid by the end of February in the following year. Businesses will have the option to request extensions or make corrections to the submitted VAT return. If a business overpays its VAT in advance, the excess amount will be refunded after the annual reconciliation.

Revocation of the option

If a business exceeds the CHF 5,005,000 turnover threshold or fails to meet VAT obligations on time, it will lose the right to opt for annual VAT reporting. In such cases, the business will be required to revert to the more frequent reporting periods, such as quarterly or semi-annual returns.

This shift to annual VAT reporting in Switzerland offers businesses an opportunity to streamline their VAT reporting obligations. However, careful attention to compliance and timely payments will be essential to avoid penalties and ensure smooth operation under the new system.

How can EFF help?

As the new VAT reporting system in Switzerland takes effect, businesses may find the transition challenging. EFF offers comprehensive VAT services, including VAT registration, compliance, and reporting. By choosing EFF, businesses can ensure that they meet all regulatory requirements while saving time and avoiding potential penalties. Contact us today to see ho we can help your business!

Sources:

– Federal Tax Administration VAT changes

Changes to VAT reporting

A key aspect of the reform is the removal of the €1,000 threshold for declaring transactions, requiring VAT payers to report all transactions. This change aims to close loopholes, as many small transactions under the threshold are often undeclared, contributing to tax evasion. In 2023, approximately €327 million in input VAT went unreported.

A 2014 reform, which required more detailed invoice declarations, resulted in an increase of over €100 million in VAT receipts. Building on this success, the Ministry believes that the introduction of e-invoices will further enhance VAT receipts by reducing administrative burdens, improving data quality, and preventing fraud. Already, 47% of entrepreneurs are prepared to adopt e-invoicing, which will also be mandatory for cross-border transactions within the EU from July 1st, 2030.

The proposed changes are expected to increase VAT receipts by €16.6 million annually and could take effect by 2027. These measures align with broader EU trends, as several countries are also moving towards mandatory e-invoicing.

Sources:

– https://www.fin.ee/uudised/rahandusministeerium-esitas-ettepanekud-kaibemaksulaekumise-parandamiseks

What exactly is EPR?

Extended Producer Responsibility (EPR) is a type of environmental policy that was first implemented in Sweden and has subsequently gained popularity in many countries around the world. The policy is based on the “polluter pays” principle, thus regulating the producer’s responsibility for the products they put on the market. Its application directly contributes to the development of a circular economy.

The main goal of EPR is proper waste management and sustainable consumption of raw materials.

According to the policy, manufacturers are responsible for the entire life cycle of products, from the moment they are manufactured to the end of their useful life. Accordingly, regulations govern the management of generated waste through payment of fees for collection, recycling, reuse and disposal.

Who is affected by the EPR regulations?

In short, the provisions of Extended Producer Responsibility apply to any person who takes part in a product’s introduction to the market. In other words, any legal or natural person whose business activity consists of developing, manufacturing, processing, selling or importing products, regardless of how they are placed on the domestic market.

Companies that sell their products directly to end consumers (B2C) are subject to different regulations than those that trade with retailers or distributors (B2B). Moreover, the requirements applied to domestic sellers differ from those applied to international sellers. Therefore, it is important to consider the type of business you are doing in order to correctly determine your obligations.

Who should apply for an EPR registration number?

• Individuals and companies that manufacture products subject to EPR
• Vendors of products subject to EPR

What products are subject to EPR?

In order to reduce waste and contribute to the development of a circular economy, the particulars of EPR are regularly updated. According to experts’ predictions, more and more products will be strictly regulated in the coming years.

Products covered by EPR:

• Packaging
• Batteries
• Electrical and electronic equipment
• Used industrial oils
• Tires
• Vehicles
• Furniture

What is a Producer Responsibility Organization (PRO)?

A Producer Responsibility Organization (PRO) (PRO) is an entity established under the Extended Producer Responsibility (EPR) system. Its task is to relieve producers of their responsibilities for managing waste resulting from their operations, in particular collection, recovery and recycling.

Key features and role of PRO:

• Assumption of producer obligations: PRO acts on behalf of producers, assuming their waste management obligations. Producers pay fees to the PRO, which funds recycling and recovery activities.
• Waste management: PRO is responsible for organizing the collection, transport, recycling, and reuse of waste generated from products placed on the market.
• Supporting a circular economy: Through waste reuse and recycling activities, PRO contributes to waste minimization and supports sustainable development.
• Regulations: PRO’s operations are strictly regulated in each country, often stemming from EU directives such as Directive 2008/98/EC on waste. These organizations are often subject to supervision to ensure compliance with regulations and the achievement of specific recycling targets.
• Application in various industries: PROs operate in many sectors, such as packaging, electronics, vehicles, batteries, and textiles. Each industry may have specific waste management requirements.

How to contact us?

Customers can contact our sustainability experts directly. At an arranged meeting, we determine how we can best meet your EPR needs. Although we operate mainly in Poland, we have many years of experience working with clients from all over Europe. Don’t hesitate to contact us if you think you could benefit from our expertise!

Responsibilities

Extended Producer Responsibility (EPR) regulations can vary from country to country, so it is important to verify exactly what obligations apply to the specific category of products a company markets. Despite the many differences, a common feature of the vast majority of cases is the presence of declaratory and financial obligations.

The main obligations of producers in Poland under the EPR:

1. Financing of waste management – manufacturers are required to cover the costs of collecting, transporting, recovering and recycling waste generated from their products. These costs include, among others:
   • Selective waste collection,
   • Environmental education,
   • Reporting on waste management activities.
2. Achieving recycling levels – manufacturers must meet certain recycling and recovery quotas, which are set by national and EU regulations. For example, in the case of packaging, a certain percentage of materials such as plastic, glass and paper are required to be recycled.
3. Cooperation with producer responsibility organizations (PROs) – producers can delegate their waste management responsibilities to PRO organizations, which manage collection and recycling processes on their behalf. The producer pays an appropriate fee for this.
4. Reporting – manufacturers are required to submit detailed reports on:
   • The amount and type of products marketed,
   • recycling and recovery activities undertaken,
   • Implementation of obligations related to environmental education.
5. Eco-design of products – EPR encourages manufacturers to design products in ways that minimize their environmental impact, such as by:
   • Limiting the amount of materials used,
   • Use of recyclable raw materials,
   • Facilitating product disassembly and repair.
6. Funding environmental education – manufacturers are required to conduct or finance educational activities that raise public awareness about separate collection, recycling and waste reduction.
7. Product labeling obligation – products placed on the market must be labeled in a way that facilitates their subsequent segregation and recycling. This applies especially to packaging.

Example: Obligations for the packaging industry in Poland

Manufacturers marketing packaged products must:

• report the amount of packaging put on the market,
• achieve certain recycling levels (e.g., for plastic or glass),
• pay fees to the waste management system, including to PRO organizations,
• ensure that their products are labeled in accordance with regulations to facilitate selective collection by consumers.

What do we offer?

We work with companies, manufacturers and individuals marketing electronic and electrical equipment, batteries and packaging, offering comprehensive support, including:

• Initial consultation to determine customer needs
• Individual case analysis
• Regulatory compliance analysis
• Calculation of estimated EPR charges
• Registration in the register of producers
• Support for appointment of attorneys
• Establish contact with Producer Responsibility Organizations
• Benchmarking and advising on EPR best practices
• Regular mapping and monitoring of legislative changes
• Advice on labeling responsibilities

What is a carbon footprint?

Carbon footprint is a gauge of the total amount of greenhouse gases, including carbon dioxide (CO₂), that have been emitted as a result of a company’s operations. It is an indicator that measures a company’s impact on climate change through greenhouse gas emissions associated with its production processes, operations, transportation, energy consumed in offices and other activities.

Carbon footprint is most often expressed in tons of carbon dioxide equivalent (tCO₂e), a unit that allows different greenhouse gases to be unified into a single measure, taking into account their global warming potential.

Why is carbon footprint an important issue from the perspective of ESG reporting companies?

The obligation to report on carbon footprint has gained significance in the context of changing legislation and a growing emphasis on the transparency of companies’ environmental activities. It has become one of the key indicators in assessing a company’s impact on climate change and thus sustainability.

Increased environmental awareness among consumers and investors is making carbon footprint not only an environmental indicator, but also a competitive element in the market. For example, companies that reduce emissions by optimizing production processes, switching to renewable energy sources or reducing water consumption can be assured of consumer loyalty and the positive evaluation of investors, who increasingly consider sustainability in their investment decisions.

Reducing carbon footprint is also an integral part of a sustainability strategy that aims to minimize the negative impact of business activities on the environment. Companies that engage in such initiatives are seen as responsible and forward. In the long run, such actions ensure an enhanced reputation and trust among all stakeholders: from employees to business partners.

How is carbon footprint calculated?

Calculating carbon footprint is a multi-step process that requires taking into account all sources of greenhouse gas emissions in a company’s operations. Carbon footprint can be divided into three ranges to be considered when calculating it:

• Scope 1 – Direct emissions: These are emissions that come directly from the company’s operations, such as the burning of fuels in furnaces, company cars or other company-owned equipment.
• Scope 2 – Energy-related indirect emissions: Include emissions related to the purchase of electricity, heat or steam. Companies should calculate emissions related to the energy consumed in their operations, taking into account the sources of that energy (e.g., coal, gas, renewables).
• Scope 3 – Indirect emissions from other sources: These are emissions resulting from the company’s entire value chain, including transportation, production of raw materials, waste, business travel, or consumer use of products. Scope 3 is typically the most complex to calculate, as it includes emissions from the activities of business partners, suppliers and customers.

When measuring carbon footprint, companies should use appropriate tools such as carbon footprint calculators, standards and protocols (a globally recognized one is the Greenhouse Gas Protocol) to help accurately determine greenhouse gas emissions.

What carbon footprint disclosures should be reported under ESRS guidelines?

Under the ESRS guidelines, which were developed by the European Union as part of the CSRD regulations, companies are required to disclose detailed information on their environmental impact, including greenhouse gas emissions. This reporting is intended to increase transparency and accountability in managing climate impacts. Companies will have to disclose:

• Total greenhouse gas emissions: Companies must disclose total greenhouse gas emissions, expressed in tons of CO₂ equivalent, broken down into direct emissions (Scope 1), indirect energy-related emissions (Scope 2) and other indirect emissions (Scope 3).
• Emission reduction targets: Companies will be required to disclose their GHG emission reduction targets, including timelines and strategies for achieving these targets, consistent with global climate goals (e.g., the Paris Agreement).
• Strategies and actions: ESG reports should outline strategies and specific actions taken to reduce greenhouse gas emissions, such as implementing energy-saving technologies or switching to renewable energy sources.
• Sustainability indicators: Companies must provide indicators to measure progress toward emission reduction targets. This could include, for example, emissions intensity per unit of production, emissions reduction per employee or energy efficiency.

Summary

A key element in managing carbon footprint is integrating appropriate operational activities into the company’s daily operations. Companies must focus on accurately monitoring and measuring greenhouse gas emissions throughout the value chain, which requires collaboration with suppliers, logistics partners and other stakeholders. Operational measures include optimizing energy consumption, introducing energy-saving technologies, reviewing production processes and efficient waste management, among others. In addition, it is necessary to regularly audit emissions, implement renewable energy solutions and transport efficiency. This approach not only ensures compliance with regulations, but also effectively contributes to reducing the company’s operational carbon footprint.

Main environmental objectives:

• countering climate change,
• climate change adaptation,
• Sustainable use and protection of water and marine resources,
• The transition to a circular economy,
• Pollution prevention and control,
• Protection and restoration of biodiversity and ecosystems.

If an activity is considered sustainable, it must first significantly contribute to one of these goals without harming others. The taxonomy aims to direct capital to projects that foster environmental transformation and to increase transparency and accountability in reporting sustainable activities.

In order for a company’s activities to be considered compliant with the taxonomy, it must meet all three conditions:

1. It must make a significant contribution to at least one of the six environmental goals.
2. It must not cause significant harm to any of the six goals.
3. Must demonstrate compliance with the Minimum Safeguards
4. In addition, the company must meet the Technical Qualification Criteria, but this condition is included in items 1 and 2.

Why is taxonomy important for companies preparing an ESG report?

For companies preparing an ESG report, the EU taxonomy provides a compliance framework and guidance to better understand the environmental impact of operations and meet regulatory requirements. The taxonomy’s provisions specifically affect:

• Transparency reporting – companies covered by the CSRD (Corporate Sustainability Reporting Directive) must demonstrate in their ESG reports the extent to which their activities are in line with the taxonomy.
• Attracting investors – sustainable actions in line with the taxonomy can increase a company’s attractiveness in the eyes of investors, who are becoming increasingly influenced by ESG criteria.
• Minimize reputational risk – Taxonomy compliance reporting helps avoid allegations of greenwashing and build credibility.

What steps should the company take?

When preparing an ESG report in accordance with the requirements of the EU taxonomy, a company should:

• Conduct an audit of activities – identify which activities are consistent with the objectives of the taxonomy and the Technical Qualification Criteria.
• Gather data – collect the necessary information on the impact of the activity on the environment.
• Understand DNSH (Do No Significant Harm) requirements – make sure that no activities violate other environmental objectives.
• Ensure compliance with the Minimum Safeguards – implement human rights and labor standards.

Summary

At EFF, we fully understand that meeting these requirements can be a challenge. Depending on the size of your company and the specifics of your industry, you may need to collect a large amount of data and meet numerous reporting requirements. Our experts are here to help you! We will analyze your operations to determine which data fits into the taxonomy criteria and how well it complies with the applicable requirements. In addition, we will support you in implementing social safeguards where needed.

Gap analysis

As experts in ESG reporting, we will analyze a set of nonobligatory standards and regulations, as well as benchmark the most important ones. We will work with you to determine which values and factors are most important within your company’s operations, including compliance with EU regulations, the attainability of aspiring decarbonization goals, and the efficiency of data collection processes.

With this in mind, we will make recommendations to fill the gaps and work with your team to create a strategy for further action.

Our team’s ESG experience allows us to provide individual support in the reporting process so that your documents not only meet regulatory requirements but also comply with market best practices.

What is ESG?

ESG, or Environmental, Social, and Governance, is a set of criteria for evaluating companies’ environmental, social, and governance impacts. These areas include efforts to reduce greenhouse gas emissions, improving working conditions, addressing social inequality, and transparency in corporate governance, among others. The introduction of the CSRD (Corporate Sustainability Reporting Directive) makes the topic of ESG even more relevant, especially in the context of mandatory reporting by companies.

What is an ESG strategy and how to prepare it in accordance with the CSRD?

An ESG strategy is a set of actions that a company takes to meet environmental, social and governance responsibility criteria. For companies required to report under the CSRD, the ESG strategy must follow the guidelines of the CSRD, covering not only sustainability goals, but also how they are measured and how ESG risks are managed.

Step 1: ESG baseline assessment – defining the starting point

The first step in developing an ESG strategy is to conduct a detailed ESG baseline assessment that will allow the company to determine the current status of its environmental, social and governance activities. It is important to understand where the company stands with respect to ESG requirements. The baseline assessment should include an audit of existing ESG practices and policies, an analysis of ESG indicators, and identification of factors that may affect the company’s operations. This analysis will give the company a complete picture of its strengths and areas that need improvement.

Step 2: Double Materiality Analysis

In the next step, it is best to conduct a double materiality analysis, which is one of the key elements in preparing an ESG strategy. This means that a company should assess which ESG factors have a significant impact on its business, as well as how the company’s activities affect society and the environment. By understanding both of these perspectives, you can not only meet CSRD requirements, but also develop a strategy that will have a real impact on the company’s sustainability. Learn more.

Step 3: Gap analysis – identification of gaps

This is followed by a gap analysis, which helps identify differences between the company’s current operations and CSRD requirements. In this step, the company makes a detailed comparison of its policies, procedures and practices with ESG disclosure requirements. Gap analysis identifies areas where the company does not yet meet the guidelines or needs further action to comply with the new regulations. Conducting a gap analysis shapes a roadmap for a company to determine what steps it needs to take to meet ESG reporting requirements. Learn more.

Step 4: Identify ESG goals

Based on the results of the baseline assessment, double materiality analysis and gap analysis, the company should proceed to define ESG goals. These goals must be clear, measurable and implementable. In doing so, it is worth keeping in mind that ESG goals are dynamic and should be tailored to the specifics of the company and the industry in which the company operates. Examples of goals might include reducing greenhouse gas emissions, improving working conditions, or increasing transparency in company management.

Step 5: Identify ESG indicators and methods to measure progress

The next step is to identify ESG indicators to monitor progress. It is important that the indicators comply with international standards and CSRD requirements. Examples of indicators include: greenhouse gas emissions, water consumption, number of hours of training, or governance-related indicators (e.g., transparency in reporting). It is also crucial to implement an effective data collection system to regularly monitor progress.

Step 6: Implement ESG measures in the company

Implementing an ESG strategy requires commitment at all levels of the company. At this stage, appropriate procedures should be put in place to achieve ESG goals, as well as education and training for employees.

Summary

Creating an ESG strategy is a complex process that requires a thorough analysis of the company’s existing policies, the identification of goals, indicators and methods for measuring them. Conducting a double materiality analysis and identifying gaps allows you to create an effective strategy that will have a real impact on the sustainability of your company

What is double materiality analysis?

Double Materiality analysis is an approach required for ESG reporting that considers two perspectives:

• Impact materiality, or how the company affects the environment and/or society.
• Financial materiality, or how the environment and/or society affects the company.

This approach provides a holistic view of the company’s relationship with the environment, indicating both its responsibilities and the potential risks and opportunities associated with sustainability.

Why is double materiality analysis crucial in the context of CSRD and ESRS?

The CSRD and ESRS standards prioritize transparency and accurate reporting of companies’ sustainability impacts. The reasons why double materiality analysis plays a key role in this process are:

• Regulatory requirements – Companies covered by CSRD must present in their ESG reports what factors are applicable to them from both a financial and environmental/social perspective.
• Report credibility – Transparency of the analysis results builds trust among investors, customers and other stakeholders.
• Risk management – By identifying relevant issues, a company can more effectively prepare for potential ESG risks, such as changing climate regulations or consumer expectations.
• Growth opportunities – Double materiality analysis also identifies business opportunities or sectors with increased potential, such sustainable agriculture or digitization of manufacture processes.

How do you conduct a double materiality analysis?

A double materiality analysis should be well planned and systematic. Here are the steps to consider:

1. Identifying ESG topics – start by analyzing which ESG topics are relevant to your industry and company. Consider, issues such as:
   • regulations (e.g., CSRD, ESRS, EU Taxonomy),
   • industry guidelines (e.g., GRI, SASB),
   • market trends,
   • stakeholder expectations.
2. Engaging stakeholders – consult key stakeholders such as customers, employees, investors, regulators or local communities. Their perspective will help you understand which ESG issues are most important to them. Dialogue with stakeholders is key in double materiality analysis, as it enables companies to understand the expectations of groups that influence and are influenced by the organization. Engaging stakeholders builds trust, increases transparency and efficiency, and long-term collaboration helps better manage the risks and opportunities of social and environmental change, improving reputation and providing added value for all parties.
3. Assessing environmental and social impact – analyze what effects your activities have on the environment and society, e.g.: greenhouse gas emissions, water and raw material consumption or human and workers’ rights.
4. Assessing financial materiality – identify what ESG risks and opportunities may affect your company’s operations, such as:
   • Regulatory risks (e.g., penalties for excessive emissions),
   • An increase in operating expenses,
   • Evolving market expectations.
5. ESG data gap analysis – the gap analysis is based on the findings of a previously conducted double materiality analysis and stakeholder dialogue. This process allows companies to accurately identify gaps between current sustainability efforts and regulatory requirements, industry best practices and stakeholder expectations. 
6. Integration with ESG report and company strategy – the conclusions of your double materiality analysis should be reflected in both the ESG report and the company’s sustainability strategy.

Challenges in double materiality analysis:

• Data collection – Companies often struggle to obtain accurate information about the environmental and social impacts of their operations. For example, manufacturing companies may struggle to monitor CO2 emissions during the various stages of production because they lack the right tools to measure them.
• Stakeholder engagement – Understanding the needs of different stakeholder groups, such as employees, local communities or environmental organizations, can require a great deal of time and resources. For example, it may be difficult for an organization to get the views of local residents on the environmental impact of its operations, which can delay the decision-making process.
• Regulatory complexity – Companies must keep track of changing regulations, such as the ESRS (European Sustainability Reporting Standards), which can vary by country or industry. For example, a company operating in the European Union may find it difficult to adapt ESG reporting to new transparency requirements that change from year to year.

Double materiality analysis is vital to ensure the compliance of ESG reporting with the CSRD and ESRS standards. It enables companies to understand both their impact on the environment and the risks and opportunities arising from global sustainability trends.

If your company is preparing for ESG reporting in accordance with CSRD and ESRS, and double materiality analysis seems challenging, our experts are here to help you! Get in touch so we can start working to develop effective and compliant solutions.

VAT adjustments

Starting 1 July 2025, the standard VAT rate will increase from 22% to 24%. This higher rate will be a temporary measure, remaining in effect until 31 December 2028, after which the rate will revert to 22% on 1 January 2029.

Additionally, adjustments will affect the hospitality sector. From January 2025, the VAT rate for accommodation services, including those that offer breakfast, will rise from 9% to 13%. It is also worth noting that another change will be the increase in the VAT rate for press publications, which will change from 5% to 9%.

These measures aim to balance fiscal needs while supporting public services and national security efforts. Businesses and consumers should prepare for these adjustments to effectively manage their finances.

Sources:

– https://www.fin.ee/uudised/ettevotted-panustavad-julgeolekusse-kasumimaksuga
– https://www.emta.ee/en/business-client/taxes-and-payment/value-added-tax#from-01012025