Switzerland

Revised VAT rates – further guidelines Tungsten is mindful of the upcoming VAT rate changes in Switzerland, expected in January 2024.  While the VAT rate change may appear superficially straightforward, there are more practical and complex considerations that come with the introduction of new tax changes, such as when VAT rate are to be applied, etc.   The Swiss government has published a comprehensive publication including information relating to the application of the new VAT rates, which can be accessed here.  

While the VAT rate change may appear superficially straightforward, there are more practical and complex considerations that come with the introduction of new tax changes, such as when VAT rate are to be applied, etc.  

The Swiss government has published a comprehensive publication including information relating to the application of the new VAT rates, which can be accessed here.  

Confirmation of new tax rates Tungsten has previously communicated on the upcoming proposed Swiss VAT rate increases expected in 2024.   Switzerland has now confirmed new VAT rates in the country in line with the following:  Normal rate 7.7% to 8.1%  Reduced rate: 2.5% to 2.6%  Special rate for accommodation services: 3.7% to 3.8%  These will be effective from 1 January 2024.   Switzerland is a compliant territory for Tungsten, and we will support the new rates in the country once effective.  

VAT rate increase We recently communicated that Swiss government were intending to increase VAT rates in the country, for the reasons outlined here. The Swiss government has now confirmed the change in VAT rates in line with the following:

• Standard VAT rate from 7.7% to 8.1%
• Reduced VAT rate from 2.5% to 2.6%
• Special rate for accommodation services 3.7% to 3.8%

The increase will come into effect on 1 January 2024. Further information around the VAT rate increase is expected from the Swiss tax authorities before the implementation of the change.

Proposed VAT rate increase We previously communicated that Switzerland is proposing to increase its VAT rates. To this effect, Switzerland will hold a further referendum to determine whether the VAT rate increase will be implemented. Tungsten Network is monitoring any tax rates changes in Switzerland. Switzerland is a compliant market at Tungsten and our solution will support any new tax rates introduced by the Swiss government.

Anticipated increase in VAT rates A few months ago, we oversaw Poland applying greater autonomy to determine their own VAT rates. More recently in Switzerland, we can see how the economic measures a country enacts can have a significant effect on the VAT rates a country deploys. In December 2021, the Swiss Parliament approved the AHV (Old Age and Survivors Insurance) 2021 reform. The measure aims to maintain AHV benefits- but this will come at a cost. Specifically, to meet additional costs for this measure, an increase in the VAT rates has been proposed. The VAT rate increases are expected in line with the following:

• Standard rate: from 7.7% to 8.1%
• Reduced rate: from 2.5% to 2.6%
• Rate for accommodation: from 3.7% to 3.8%

A referendum is expected in autumn 2022 to approve these rates. If approved, these are expected to take place in 2023. Tungsten Network will monitor any new tax rates, if approved, in Switzerland and ensure these are implemented as part of our portal solution.