It seems that since the beginning of 2024, all we have been bringing you is information on price increases, and this post is no exception! Starting January 1, 2024, Switzerland raised their “Mehrwertsteuer” (value added tax; VAT) rates. This increase was voted in by the population in a public referendum that took place on September 25, 2022. Switzerland has three different VAT rates for various goods and services (also see https://www.estv.en/home/value-added-tax/va-rates-switzerland.html):

• Standard rate: The country’s most commonly used standard VAT rate is an important source of revenue for the state. It is levied on a broad range of goods and services from clothes, furniture, jewelry, or cars to restaurant dining, alcohol, and tobacco. As of January 1, the standard VAT rate in Switzerland is 8.1%, up from the previous 7.7%.
  
• Reduced rate: Goods and services that are considered essential are subject to a reduced VAT rate, which as of January 1 increased from 2.5% to 2.6%. Goods taxable at this lower rate include, among others, foodstuff (excluding alcoholic beverages), water, medications, plants and flowers, animal feed, cultural and sporting events, or printed products like books and magazines. Interestingly, while eating in a restaurant is taxed at the standard 8.1%, food that is intended for takeaway, delivery, or sold through vending machines is subject to the reduced VAT rate of 2.6%.
  
• Special rate: In addition, Switzerland also has a special VAT rate of 3.8% (up from 3.7%) that is applied to accommodations services like hotel stays (including breakfast) and holiday apartment rentals.

Several goods and services are exempt from VAT entirely in Switzerland. These include postal services, healthcare and welfare services, cultural services (eg, museums, libraries), education and supplies in the field of education and training, sports and sports competitions, and insurance, but also betting, gaming, and lotteries.

It is important to note that even despite this recent increase, the new standard Swiss VAT rate is still far lower than those in the member countries of the European Union or the U.K. For example, rates are 19% in Germany; 20% in France, Austria, and the U.K.; 22% in Italy; 24% in Finland; and a whopping 25% in Sweden, Norway, and Denmark!

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