With the results of the "AHV 21" vote of September 25th on the stabilisation of the OASI (Old-Age and Survivors’ Insurance) reform, the rates of value added tax (VAT) will probably increase on January 1st of 2024. But what does this mean for the Swiss population?
VAT rates
The Federal Tax Administration will probably adjust the VAT rates as follows on 01.01.2024:
Life will therefore become slightly more expensive in almost all areas of life. Here are some examples:
Until now Change New
Standard Rate 7.7% +0.4% 8.1%
Reduced Rate 2.5% +0.1% 2.6%
Special Rate 3.7% +0.1% 3.8%
Buying clothes, electronic devices or services (standard rate) for CHF 100 will cost 40 cents more. Buying medicine and food (reduced rate) for CHF 100 will be 10 cents more expensive. An overnight stay in a hotel (special rate) for CHF 100 will also be 10 cents more expensive.
What are the consequences for companies?
Businesses have to be a little more careful than consumers. If VAT changes, their accounting software and the prices of their products and services must be adapted.
In addition, when changing years, attention must be paid to the tax rate to be used. Neither the date of invoicing nor the date of payment is decisive. What is decisive is the time or period in which the service is provided. Services provided until 31.12.2023 are subject to the old tax rates and those provided from 01.01.2024 to the new rates.
Periodic services that are paid in advance for a year, such as subscriptions, must be apportioned. If a service is provided from July to July, 6 months will be counted with the old tax rate and 6 months with the new rate.
