In its session of 30 May 2017, the Council of States advocates extending the special rate for accommodation services of 3.8% for an initial period of 10 years. He is thus voting against the motion of the National Council which wants to anchor the special rate 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 anchored in the VAT Act (see our contribution of 13 April 2017).
According to a media release dated 25 April 2017, the Committee on Economic Affairs and Taxation of the Council of States (WAK-S) had subsequently, at its meeting on 25 April 2017, deliberated on the continuation of the special VAT rate subject to the decision of the National Council and supported by 9 votes to 4 the proposal of the majority of the WAK-N (or the proposal 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 then discussed in a special session of the National Council on 4 May 2017, which 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 thus in favour of the minority's motion. In the overall vote, the proposal was adopted by 114 votes to 62 with 10 abstentions. The National Council thus came out in favour of a definitive legal anchoring of the special VAT rate of 3.8% for accommodation services (see our contribution of 4 May 2017).
The Council of States discussed the proposal at its meeting on 30 May 2017 and approved the motion of the majority of the WAK-S in the overall vote by 44 votes to 0 with 0 abstentions (unanimity). In detail, it voted by 36 votes to 8 with 0 abstentions in favour of a ten-year and against a three-year extension of the special rate and by 12 votes to 32 with 0 abstentions against the proposal to enshrine the special rate in the law for an indefinite period. In conclusion, the Council of States thus supports the Federal Council's proposal to extend the special rate for an initial period of 10 years until the end of 2027.
Since the National Council had spoken in favour of a definitive legal anchoring of the special rate, there is a difference between the two chambers of parliament, which the National Council will already discuss on 31 May 2017 in accordance with its programme for the 2017 summer session.
The minutes of the parliamentary debate of the Council of States of 30 May 2017 are available here (see also the NZZ article of 30 May 2017).
