The current rate of 8% is set to drop on 1 January 2018. Temporarily increased by 0.4% in 2011 to shore up funding for disability welfare, the rate will revert to 7.7%. The 0.1% difference between the new rate and pre 2011 rate of 7.6% is a new increase that will be used to help finance rail infrastructure. ©_Toscawhi _ Dreamstime.com Switzerland has three VAT rates: a standard rate (8%), a hotel rate (3.8%) and a reduced rate (2.5%). From 1 January 2018, these will fall to 7.7%, 3.6% and 2.5% (unchanged). The recent pension reform referendum aimed to use the extra VAT revenue to boost funding of pensions, however the vote failed. The extra 0.1% to fund rail infrastructure is a move decided by a referendum in 2014. A 0.1% increase might sound trivial, but it is expected to raise an extra
Topics:
Investec considers the following as important: Editor's Choice, Personal finance, Swiss VAT
This could be interesting, too:
Investec writes End of lifelong widows’ pensions moves closer to reality
Investec writes Swiss government deficit shrinks further
Investec writes Swiss government wants to invest more in bomb shelters
Investec writes Children most affected by poverty in Switzerland and need more assistance, says report
The current rate of 8% is set to drop on 1 January 2018. Temporarily increased by 0.4% in 2011 to shore up funding for disability welfare, the rate will revert to 7.7%. The 0.1% difference between the new rate and pre 2011 rate of 7.6% is a new increase that will be used to help finance rail infrastructure.
Switzerland has three VAT rates: a standard rate (8%), a hotel rate (3.8%) and a reduced rate (2.5%). From 1 January 2018, these will fall to 7.7%, 3.6% and 2.5% (unchanged).
The recent pension reform referendum aimed to use the extra VAT revenue to boost funding of pensions, however the vote failed.
The extra 0.1% to fund rail infrastructure is a move decided by a referendum in 2014. A 0.1% increase might sound trivial, but it is expected to raise an extra CHF 300 million per year.
Consumer advocates are concerned savings from the new rates, estimated at CHF 900 million per year, will not be passed on to consumers. Speaking to the newspaper Le Temps, price watch dog Stefan Meierhans, known also as Mr. Price, called on retailers to ensure consumers benefited from the fall.
Robin Eymann from the Fédération romande des consommateurs (FRC) went further promising to compare prices before and after 1 January 2018 to identify any foul play. Spokespeople from Migros and Coop promised customers would benefit from lower prices, according to the newspaper.
Is it time to dig out old receipts?
More on this:
Swiss federal tax administration (in French) – Take a 5 minute French test now
Le Temps article (in French)