Advance Payments and Deposits: How to Invoice Them (and When VAT Applies)

Bigger projects often start with a deposit — an Anzahlung or Akonto — paid before the work begins. It protects you against a client who disappears, and it covers the materials and time you commit up front. But invoicing an advance payment has its own rules in Switzerland, especially once VAT enters the picture.

When to ask for a deposit (and how much)

A deposit makes sense whenever you commit real time or money before you are paid. Custom work, materials you must buy, or a new client with no payment history are the classic cases.

Typical amounts run from 30 to 50 percent for larger projects, and sometimes 100 percent for short, material-heavy jobs. There is no legal rule — the amount is a commercial decision you agree with the client.

Put the deposit in your offer and order confirmation: the amount, the percentage, and when it is due. A deposit agreed in writing is one fewer thing to argue about later.

For a new client, a deposit is also a simple credit check. A customer who resists a reasonable advance may well struggle to pay the final invoice too.

How to invoice a deposit correctly

Invoice the deposit as a normal, numbered invoice. Label it clearly — “Anzahlung 50%” or “1. Akonto-Rechnung” in the subject line — and reference the project or order number.

The invoice must carry the same fields as any other: your details, the client, the date, a running number, the amount, and the MWST rate if you are registered.

Give the deposit its own payment terms and a QR-Rechnung (QR-bill) so the client can pay by scanning. Every advance invoice gets its own payment reference, separate from the final bill.

Never hide a deposit inside the final invoice after the fact. A separate, clearly-labelled advance invoice keeps your books clean and the audit trail easy to follow.

VAT on advance payments

Under the standard method of accounting on agreed consideration (vereinbartes Entgelt), VAT falls due when the invoice is issued or the payment arrives — whichever comes first. A deposit therefore triggers output VAT in the period you invoice or receive it.

That means you report the deposit in that quarter's MWST return, even though the work has not been delivered yet. The advance counts as an independent taxable consideration.

If you account on received consideration (vereinnahmtes Entgelt), the liability arises only when the money actually lands in your account. The invoice alone does not create it.

Show the VAT rate and amount on the deposit invoice exactly as on a final invoice. Your client needs it to reclaim their own input VAT (Vorsteuer).

The final invoice and netting the deposit

When the work is delivered, issue a final invoice for the full amount, then deduct the deposit as its own line — “abzüglich Anzahlung” — showing what has already been paid, VAT included.

Charge VAT only on the remaining balance. The deduction line reduces the net and the gross, so the client pays the difference rather than the full price twice.

Keep the trail visible: the final invoice should name the deposit invoice number, so anyone can see how the two documents belong together.

If the project is cancelled, refund the deposit and issue a credit note (Gutschrift) to correct the VAT you already reported — exactly as you would for any other reversed sale.