Fall Session: Mercosur, UBS Act & Bilaterals III

Context

At a Glance

• The Council of States approves the decrees on Bilateral Agreements III
• Bilateral Agreements III: mandatory vote and double majority
• Lex UBS: 90% CET1 coverage for UBS
• Hotel VAT at 3.8% through 2031

Key Facts

• Session → fall session, concluded with final votes
• Bilateral Agreements III → mandatory vote and double majority of the people and the cantons
• Lex UBS → 90% CET1 capital coverage for UBS
• Hotel VAT → reduced rate of 3.8% through 2031
• Mercosur → Argentina, Brazil, Paraguay, and Uruguay

After 24 hours of debates spread over six days, the Federal Chambers closed the fall session today with final votes. ATS reports that among the approved measures are the roundtable for Crans-Montana, the agreement with Mercosur, and the passage of the so-called Bilateral Agreements III.

The Council of States approved all federal decrees in the package of agreements with the EU. The most significant decision concerns the mandatory vote on the Bilateral Agreements III: a double majority of the people and the cantons will be required. The measure now moves to the National Council, which has yet to vote on it.

Banks, VAT, and Trade Agreements

The bill known as the “Lex UBS,” however, has been initiated but not finalized. The Council of States decided, despite opposition from UBS, that the bank must ensure 90% coverage with Common Equity Tier 1 (CET1) capital for the foreign holdings of systemic banks.

The provisions regarding VAT also remain unresolved. The Council of States has proposed a 0.2 percentage point increase to fund the military through 2045, but the measure has yet to be confirmed by the other chamber. The two chambers, however, decided to extend the reduced VAT rate for the hotel sector—currently at 3.8%—until 2031.

On foreign trade, Parliament adopted the free trade agreement between the EFTA states—including Switzerland—and Mercosur, comprising Argentina, Brazil, Paraguay, and Uruguay. Civil society organizations active in environmental protection and human rights have already announced a referendum.

Regarding Crans-Montana, the Chambers reached an agreement on the law authorizing the Confederation to contribute 20 million francs to the roundtable established following the New Year’s Eve fire. The solidarity contribution of 50,000 francs for each victim—in a fire that claimed 41 lives and left over 100 injured—had already been approved in March.

Operational details

A Practical Guide to Legislative Dossiers

Not all approvals carry the same procedural weight. To follow the session, it is helpful to distinguish between decisions adopted by the two chambers, proposals still pending, and dossiers put to a popular vote. This distinction clarifies what has already been decided and what remains to be addressed.

An overview of the status of legislative proposals

The mandatory referendum on Bilateral Agreements III makes the parliamentary phase just one of several key stages: the National Council has yet to vote, and the final decision will require a double majority of the people and the cantons. For those who follow federal politics, the parliamentary process and the popular vote are therefore two distinct stages.

Mercosur is following a different path. Parliament has adopted the agreement, but civil society organizations have announced a referendum, and sources indicate that the final say should rest with the people. Parliamentary adoption, therefore, does not mark the end of the process.

On the VAT front, the two issues should not be lumped together. The 0.2-point increase to fund the military remains a proposal from the Council of States and is awaiting consideration by the other chamber. The extension of the reduced hotel tax rate, on the other hand, has been approved by both chambers of Parliament, with a term running through 2031. For the hotel sector, the difference between a pending measure and an approved extension is significant.

As for the banks, the source lists the UBS Act among the unfinished projects: the Council of States has approved 90% of the funding. This distinction avoids confusing a chamber’s decision with the closure of the dossier. Regarding the banking chapter, readers can cross-reference this analysis with conti bancari in Svizzera.

Finally, the revision of the TTPCP provides a clear comparison over time: starting in 2031, electric trucks will also be subject to the tax, whereas today 90% of heavy-duty vehicles fall into the least expensive category. For those in the transportation industry, this session provides a future date and a snapshot of the current system.

Recommended tools

For an updated estimate, use the net salary calculator and the CHF-EUR exchange comparator.

Key points

What to Keep an Eye On Now

To track these issues without confusing approvals, proposals, and referendums, monitoring can be organized into five key areas.

Five Key Areas to Monitor

1. Bilateral Agreements III. Mark the National Council as the next key step. The decision will then require a double majority of the people and the cantons: the vote in the Council of States alone does not conclude the process.

2. Mercosur. Keep the agreement adopted by Parliament separate from the referendum already announced by civil society organizations. The source indicates that the final say should rest with the people.

3. VAT. In the hotel sector, note the extension of the reduced rate of 3.8% through 2031. Regarding military funding, consider the 0.2% rate through 2045 as a proposal from the Council of States awaiting consideration by the other chamber.

4. TTPCP. If you follow heavy-duty transportation, note that 2031 is the year when electric trucks will also be subject to the tax, and compare this with the current figure of 90% of vehicles in the lowest-cost category.

5. Severance Pay. For executives in the Federal Administration and parastatal companies, distinguish between the ban on payments and terminations not attributable to the employee, such as those resulting from reorganization.

The calendar provides an additional point of reference: the winter session will be held from November 30 to December 18. For future crises, the key point to examine will be the detailed justification that the Federal Council must provide for each invocation of the right of necessity—a decision made in light of the experiences of the pandemic and the recent UBS crisis.

Meanwhile, the revision of the Electrical Installations Act, the Electricity Supply Act, the abolition of the statute of limitations for murder, the extension of the simplified hiring process for doctors, the amendment to the supervision of insurers, and the partial revision of the Federal Supreme Court Act are among the items approved.

For fur purchases, practical oversight takes place at the time of purchase: Swiss fur shops, clothing stores, and online retailers will be required to indicate the production method and provide proof that no suffering was inflicted on the animals. Regarding foie gras, the counterproposal focuses instead on labeling and reducing sales.

To see the impact of the VAT and daily costs proposals, consult costo della vita in Svizzera. To relate the decisions to your income, use calcolatore stipendio.

Source: swissinfo.ch