Switzerland Extends Special VAT Rate for Accommodation Services

3.8% Special Rate Extended until the End of 2031

During its autumn session, the Federal Parliament adopted an amendment to Article 25(4) of the Federal VAT Act (MWSTG). The amendment extends the period during which accommodation services are taxed at the special rate. The rate itself remains at 3.8%, but it will now apply until 31 December 2031 instead of 31 December 2027.

Without the extension, accommodation services would have been taxed at the standard rate of 8.1% from 2028.

Find here our overview of VAT rates in Europe.

According to the Federal Council, around 8,200 taxable persons, roughly 2% of all VAT-registered businesses, reported supplies at the special rate in 2024. The change does not require any amendment to the VAT Ordinance (MWSTV).

Parliament Opts for a Shorter Extension than Proposed

The extension implements Motion 24.3635, “MWST-Sondersatz. Planungssicherheit für den Tourismus”, which Parliament passed in 2025. The legislative process unfolded as follows:

• 15 April 2026: the Federal Council adopted its dispatch proposing an extension until the end of 2035, aligned with the expiry of the Confederation’s power to levy VAT. However, it did not recommend that Parliament approve the bill. It argued that the sector’s record performance no longer justified the tax relief, and estimated the resulting revenue loss at around CHF 300 million a year.

• 16 June 2026: the National Council declined to consider the bill.

• 17 September 2026: the Council of States approved the bill by 31 votes to 9.

• 28 September 2026: the National Council took up the bill and approved it by 101 votes to 86, with a shorter time limit than the one proposed by the Federal Council.

• 2 October 2026: both chambers approved the amendment in their final votes.  

Next Step: Optional Referendum

The amendment is subject to an optional referendum. A referendum may be requested within 100 days of the law’s publication in the Federal Gazette. If no referendum is held, or if voters approve the law, the 3.8% special rate would continue to apply without interruption from 1 January 2028 until 31 December 2031.

Other VAT Rate Changes in Switzerland and Europe

This is not the only change to Swiss VAT rates on the horizon. Parliament has also approved an increase in VAT rates to fund the 13th AHV pension payment, which would raise the accommodation rate to 4.0% and the standard rate to 8.5%, subject to a mandatory referendum.

Elsewhere in Europe, Cyprus, Ireland and Hungary have adjusted their VAT rates in 2026, while further changes have been announced or proposed in the UK, Austria, Latvia and Poland.