In a referendum on 25 September 2022, the Swiss voted in favour of raising VAT and withholding tax and a uniform retirement age of 65 for women and men. These measures are intended to help stabilise the “Alters- und Hinterlassenenversicherung (AHV)”, which has encountered financial difficulties.
The changes in Swiss VAT rates
VAT rates were last adjusted in 2021. The table shows the current and the future tax rates.
| Since 1/1/2021 | From 1/1/2024 | |
| Standard rate for services, cars, watches/jewellery, alcohol & tobacco products | 7.7% | 8.1% |
| Reduced rate for foods, pharmaceuticals, and newspapers & books | 2.5% | 2.6% |
| Special rate for hotel accommodation | 3.7% | 3.8% |
| Insurance, Financial Services, Real Estate, Education & Health | 0% | 0% |
The Swiss VAT system
Switzerland’s current VAT system was introduced in 1995 and is administered under the direction of the Federal Tax Administration. The rules for VAT registration, VAT accounting, compliance and other reporting requirements for non-Swiss traders are drawn up by this body.
Switzerland has set its VAT rates as it is not part of the European Union and therefore does not have to follow EU directives.
The Swiss withholding tax
The withholding tax is a tax levied by the federal government on capital income, primarily to reduce tax evasion. This includes income from capital assets, lotteries, and insurance.
Applying the correct VAT rate
With eClear’s embedded solution, VATRules, you access a database of certified VAT rates on-demand – directly in your tech ecosystem. Your product prices thus automatically consider the VAT rates currently applicable in the EU-27, Switzerland, and Northern Ireland. The VATRules database includes the standard VAT rates and all country-specific reductions, exemptions and temporary adjustments. VATRules is the basis for the preparation of accurate VAT reports.
