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Are insurance benefits subject to VAT due to a damage event? The taxpayer settles with the flat-rate tax rate.

March 14, 2025

Tax law

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Insurance benefits due to a loss event are not considered remuneration under the provisions of the Value Added Tax Act (VAT Act, MWSTG) and therefore are not subject to VAT liability. This is derived from Art. 18, para. 2, letter i of the VAT Act, which defines payments for compensation and satisfaction as cash flows exempt from VAT (Art. 18, para. 2, letter i of the VAT Act).

Since the taxpayer accounts for VAT through the flat rate, it is still important that the inflow of insurance funds is correctly declared in the VAT return. These cash flows must be listed in item 910 of the VAT return (buchhaltungs-forum.ch/t/zahlung-von-versicherung-verbuchen/1726 2).

In summary:

- Insurance benefits due to a loss event are not subject to VAT (Art. 18, para. 2, letter i of the VAT Act).

- These payments should be declared in the VAT return as cash flow under item 910 (buchhaltungs-forum.ch/t/zahlung-von-versicherung-verbuchen/1726 2).

If these points are correctly observed and booked, there is no obligation to pay VAT on these insurance benefits.

Sources

Art. 18 para. 1 VAT Act

1 The domestic tax applies to the services provided for a fee by taxable persons in the domestic territory; they are taxable to the extent that this law does not provide for an exception.

Art. 18 para. 1 VAT Act

1 The domestic tax applies to the services provided for a fee by taxable persons in the domestic territory; they are taxable to the extent that this law does not provide for an exception.

buchhaltungs-forum.ch/t/zahlung-von-versicherung-verbuchen/1726 2

Best regards, Aida 9.5 T. views swasilew Feb. 2018 Hi Adia Compensation does not qualify as consideration under the VAT Act Art. 18 Para 2 Letter i due to lack of counterperformance and therefore is not subject to VAT. However, the inflow must be declared as a cash flow in the VAT return in item 910. Best regards, Sylvia sisu March 2018 Sylvia has already written the essentials. I would account for the service under the 8 accounts (extraordinary income). LG Sisu Responses ADVERTISEMENT New and unread topics Topic list, column headers with buttons are sortable. Topic Responses Activity Booking licenses with holdings Accounting 4 May 2024

buchhaltungs-forum.ch/t/zahlung-von-versicherung-verbuchen/1726 2

Best regards, Aida 9.5 T. views swasilew Feb. 2018 Hi Adia Compensation does not qualify as consideration under the VAT Act Art. 18 Para 2 Letter i due to lack of counterperformance and therefore is not subject to VAT. However, the inflow must be declared as a cash flow in the VAT return in item 910. Best regards, Sylvia sisu March 2018 Sylvia has already written the essentials. I would account for the service under the 8 accounts (extraordinary income). LG Sisu Responses ADVERTISEMENT New and unread topics Topic list, column headers with buttons are sortable. Topic Responses Activity Booking licenses with holdings Accounting 4 May 2024


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