In a special session on 4 May 2017, the National Council opposes the majority motion of its Commission for Economic Affairs and Taxes (WAK-N) and intends to anchor the special rate of 3.8% for accommodation services permanently in the VAT Act.
The underlying parliamentary initiative of Dominique de Buman (15,410) calls for the special rate of 3.8% to be definitively anchored in the VAT law in future. Following the consultation process, however, the Committee for Economic Affairs and Taxation of the National Council (WAK-N) had come out in favour of a limited extension of 10 years (see media release of 15 March 2017). In doing so, it wants to give the industry planning security, but still have the possibility of regularly reviewing the special rate. In accordance with its statement of 12 April 2017, the Federal Council shares the view of the WAK-N that the special rate should be extended by 10 years instead of being definitively enshrined in the VAT Act (see our contribution of 13 April 2017)
According to a media release dated 25 April 2017, the Committee for Economic Affairs and Taxation of the Council of States (WAK-S) had then, at its meeting on 25 April 2017, deliberated in advance on the continuation of the special VAT rate for accommodation services, subject to the decision of the National Council, and supported by 9 votes to 4 the motion of the majority of the WAK-N (or the motion of the Federal Council), i.e. to extend the special rate initially by 10 years until the end of 2027. The minority of the WAK-S, on the other hand, only wants to extend the special rate by three years until the end of 2020 (see also the article by Jeannette Bucher of 26 April 2017, VAT blog by Ludwig + Partner).
The bill was now discussed by the National Council in a special session on 4 May 2017. The WAK-N's motions to amend Art. 25 para. 4 of the Value Added Tax Act (MWSTG) are as follows:
- Motion of the majority: "The tax on accommodation services is 3.8 percent (special rate). The special rate is valid until 31 December 2020 or, if the deadline is extended in accordance with Article 196 number 14 paragraph 1 of the Federal Constitution, until 31 December 2027 at the latest. The accommodation service is deemed to be ...".
- Minority motion: "The tax as accommodation services is 3.8 percent (special rate). The taxable amount for lodging services is..."
The National Council voted by 92 votes to 89 with 5 abstentions against the motion of the majority of the WAK-N (or against the opinion of the Federal Council) and in favour of the minority motion. In the overall vote, the proposal was adopted by 114 votes to 62 with 10 abstentions.
The National Council is thus in favour of a definitive legal anchoring of the special VAT rate of 3.8% for accommodation services. The Council of States will debate the bill in the 2017 summer session.
The minutes of the parliamentary debate of the National Council on 4 May 2017 are available here. See also the article in the NZZ of 4 May 2017 on the National Council's voting results and the commentary in the NZZ of 4 May 2017 on the reactions.
