Summary
- Parliament approved a VAT increase effective from 2028 (standard rate to 8.5%).
- Measure aims to finance the newly introduced 13th state pension payment.
- Final implementation depends on approval through a mandatory referendum.
Article
Switzerland has taken a significant step toward increasing VAT rates as part of a broader effort to finance pension system reforms.
Parliament approved a 0.4 percentage point increase in the standard VAT rate, raising it from 8.1% to 8.5% from 2028. The hotel sector rate will also increase modestly, while the reduced rate for essential goods remains unchanged. [swissinfo.ch]
The reform is directly linked to the introduction of a 13th monthly pension payment, approved by referendum in March 2024, which is expected to cost approximately CHF 4.2 billion annually. [vatupdate.com]
However, the VAT increase itself requires a constitutional amendment and public referendum, meaning implementation is not yet certain. This underscores Switzerland’s direct-democracy framework, where major tax changes must be validated by voters.
For businesses, the measure signals the need for early preparation, particularly given Switzerland’s traditionally low VAT rates and the increasing reliance on indirect taxation to finance social spending.
External links:
Swiss House Approves VAT Hike for 13th Pension, Rejects Mixed Funding
- The Swiss House of Representatives approved only a 0.4-point VAT increase to fund the 13th AHV/AVS pension payment.
- It rejected the proposed 0.2-point rise in employees’ contributions, so mixed financing was not accepted.
- The vote was 104–87 for the VAT hike and 98–96 against salary contribution changes.
- Supporters argued funding should come solely from VAT; critics said the right was blocking mixed funding to push retirement-age increases.
- The measure still needs final confirmation by both chambers on Friday, and the 13th pension is set to be paid from December.
Source: swissinfo.ch
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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