The increase in VAT rates introduced in 2011 for the purpose of IV supplementary financing expires at the end of 2017. It remains to be seen whether VAT rates will fall. The current VAT rates are to be retained in order to close the financing gap in the AHV. This, however, requires a referendum, the outcome of which is open.
In a press release dated 23 February 2017, the Federal Tax Administration (FTA) outlined the development of VAT rates from 1 January 2018.
The VAT rates are directly anchored in Art. 130 and Art. 196 No. 14 of the Federal Constitution. Consequently, any change in VAT rates must be decided by referendum by the people and the Estates. From 2011, the rates of 8% (standard rate), 3.8% (special rate for accommodation) and 2.5% (reduced rate) will apply to VAT.
In the referendum of 9 February 2014, the people and the cantons have already agreed that all three VAT rates will be increased by 0.1 percentage points as of 1 January 2018 in favour of financing the expansion of the railway infrastructure (FABI). In addition, as part of the 2020 pension reform, it is now planned to raise VAT rates again in order to close the financing gaps in the AHV. The increase is to be made in such a way that the currently applicable VAT rates remain unchanged from 1 January 2018.
Whether the current VAT rates will be maintained after 1 January 2018 will therefore depend on the outcome of the referendum on the 2020 pension reform, which is expected to take place on 24 September 2017.
If the VAT rates change on 1 January 2018, there will be little time to adapt the ERP and billing systems. According to the press release issued by the FTA, it therefore makes sense for companies to prepare for any adjustments in good time.
In its press release of 23 February 2017, the FTA also published a table showing the effects of the 2020 pension reform that are still outstanding.
