Switzerland Plans to Increase VAT Rates From 2028

Latest Update: Swiss Voters to Decide on VAT Increase on 29 November 2026

Swiss voters will decide on the VAT increase to finance the 13th AHV pension in a referendum on 29 November 2026, and the Federal Council recommends a yes vote. The higher rates are expected to raise around CHF 1.5 billion a year for the AHV. The 13th pension will be paid for the first time in December 2026.

How Will VAT Rates Change in Switzerland?

The VAT rate changes approved by Parliament are:

• Standard VAT rate increases by 0.4 percentage points, from 8.1% to 8.5%.
• Special rate for accommodation services (hotels) increases by 0.2 percentage points, from 3.8% to 4.0%.

Parliament has also extended the special rate for accommodation until the end of 2031. If voters approve the increase, that special rate would apply at 4.0%.

The reduced rate for essential goods, such as food and medicines, remains unchanged at 2.6%, the level applicable from 2024. All revenue raised by the increase will be allocated in full to the AHV compensation fund, which finances Switzerland's old-age pension system.

Find the VAT rates in Switzerland in our VAT manual.

Background: Financing the 13th AHV Pension

The 13th AHV pension is an additional annual pension instalment that Swiss voters approved in a popular vote. Financing this extra payment required additional resources for the AHV system, and the two chambers of Parliament debated at length whether the cost should be covered through a VAT increase alone or combined with higher payroll contributions. The compromise ultimately adopted relies on VAT alone, with no increase in payroll contributions.

Is the VAT Increase Final?

Not yet. The increase must still be approved by the Swiss people and the cantons in the referendum on 29 November 2026, as required for any constitutional amendment. If voters approve it, the new rates are expected to apply from early 2028. If voters reject the measure, the VAT increase will not proceed and an alternative financing solution will need to be found. Contact Marosa if you would like to discuss how this potential change could affect your Swiss VAT compliance.

What Should Businesses Do Now?

While the increase is not yet in force, businesses that are or will become liable for Swiss VAT, including foreign businesses registered for VAT in Switzerland, may want to start reviewing the potential impact on:

• ERP and billing system VAT rate configurations
• Pricing and contracts referencing current VAT rates
• Long-term contracts spanning the potential rate-change date

Find here our overview of VAT rates in Europe