What does it mean that the federal budget goes from a deficit of 700 million to a surplus of 800 million?

The Federal Council had initially predicted that the 2026 regular budget would close with a deficit (expenditure greater than revenue) of 700 million francs. Based on tax data from the Cantons in the summer months, it emerged that corporate income tax revenues were higher than expected. As a result, the budget has been reversed: instead of losing money, the Confederation will have a surplus of just under 800 million francs. It is a significant upward correction of about CHF 1.5 billion from the initial projections.

Where does this increased revenue come from?

The largest revenue comes mainly from corporate income tax. This tax depends on the profitability and profits of Swiss companies. If companies make higher than estimated profits, tax payments on the profit also increase. The cantons, which collect the cantonal tax on profits, already told the federal government at the beginning of the summer that revenues would be better than expected. This allowed the Federal Council to correct the federal projections upwards.

Will the surplus be used to reduce taxes or fees?

No, the surplus of the 2026 ordinary budget is not intended for reductions in taxes or income taxes. Instead, the Federal Council has already earmarked a significant part — 970 million francs — for additional credits for armament and air defence. The remainder of the surplus serves to balance the overall budget and to ensure a conservative management of federal public finances, in preparation for the 2027 budget.

What is the 470 million earmarked for the Cantons for Ukrainian refugees?

This is an extraordinary expense of the Confederation. In the 2026 extraordinary budget, the Confederation estimates to transfer 470 million to the Cantons as extraordinary contributions for the support of persons seeking protection from Ukraine. These funds help the Cantons cover the costs of reception, social assistance and basic services for Ukrainian refugees. It is a separate item from the ordinary financial statements and remains stable at 470 million.

Why does the SNB distribute more profits than expected?

The Swiss National Bank (SNB) manages Switzerland's gold reserves, carries out market operations and applies monetary policy. The SNB's balance sheet is subject to changes due to interest rates, fluctuations in gold and foreign currency prices, and investment returns. In 2026, the SNB was able to distribute 300 million francs more than budgeted, helping to strengthen the extraordinary budget of the Confederation and reporting a solidly positive management of national reserves.

Budget 2026: from deficit to surplus of 800 million (cross-border guide)

Di Marco Ferrari · Published on 19 August 2026

View of Bern, Switzerland's federal capital and seat of federal government

Higher tax revenues from businesses push the federal budget beyond expectations, with an $800 million surplus instead of the expected deficit.

Context

In a nutshell

Budget 2026: surplus of 800 million instead of the deficit of 700 million
Income from corporate income tax above expectations
970 million additional credit for armament
BNS distributes 300 million more than expected

Key facts

What: Drastic change from deficit to surplus in the 2026 federal budget
When: 2026 (current projections)
Where: Swiss Confederation, federal government
Who: Federal Council
Expected deficit amount: CHF 700 million
Current surplus amount: approx. CHF 800 million
Additional armament credit: CHF 970 million
Increased SNB revenue: CHF +300 million

An economic scenario that improves from year to year: the Swiss Confederation's 2026 regular budget is heading towards a surplus of just under 800 million francs. A net reversal from the initial forecasts, which had estimated a deficit of 700 million. The positive surprise comes from higher corporate income tax revenues — a sign that corporate income tax has benefited from a stronger-than-expected economic performance.

This tax growth by companies was already outlined at the beginning of the summer, based on data on tax revenues from the cantons. The Federal Council was therefore able to take into account the improvement in the 2027 budget, correcting the Swiss public finance numbers upwards. A situation of

Operational details

How the Cantons benefit from the federal budget

Higher tax collections at the federal level have direct implications for cantonal administrations as well. The budget of the Confederation affects the capacity of the State to transfer contributions to the Cantons — both in the ordinary budget (through federal subsidies and compensation for cantonal public functions) and in the extraordinary budget (as in the case of the 470 million allocated to the Cantons for the reception of Ukrainian refugees). A federal surplus of almost 800 million confirms the soundness of the Swiss tax system and the ability to finance both current expenses and extraordinary investments.

Corporate income tax — which generates these higher revenues — is a tax source sensitive to the economic cycle. The fact that revenues grew more than expected signals a more resilient economy than had been estimated at the beginning of the year. The Cantons will be able to count on more stable federal transfers in the following months and years, which affects their ability to fund health, school, local infrastructure and social services. A conscious planning of the costo della vita in Svizzera also goes through understanding how federal stability supports cantonal public services.

Armament: Federal Budget Priority

The $970 million additional armament credit reflects a strategic decision by the federal government to invest in defense capability and

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Key points

The 2027 budget benefits from the best fiscal situation

The projections for the 2026 budget — which show a surplus of almost 800 million — have allowed the Federal Council to adjust the 2027 budget upwards. This means that the estimates for the next financial year already take into account a more favorable situation than what was expected twelve months ago. Fiscal stability and growth in corporate income become an anchor for medium-term budget planning.

However, the fact that ordinary expenditures should exceed the budget value — due to the additional credit for armament — indicates that the Federal Council remains cautious in assessing the sustainability of the budget in the long term. An 800 million surplus is comforting, but is partially reinvested in defense investments, not conserved as a liquidity reserve. Prudent management of federal finance remains the guiding principle, even in the phase of fiscal expansion.

Management of funds and federal transparency

The way the Federal Council manages this improvement in the budget reflects the priorities of federal policy: maintaining defensive capacity, supporting the Cantons in their burdens (particularly for Ukrainian refugees) and preserving budget balances in the medium term. This is not a situation of abundance from which to draw in a general way, but a correction upwards that allows for more stable financing of projects already identified as priority.

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Frequently Asked Questions

What does it mean that the federal budget goes from a deficit of 700 million to a surplus of 800 million?: The Federal Council had initially predicted that the 2026 regular budget would close with a deficit (expenditure greater than revenue) of 700 million francs. Based on tax data from the Cantons in the summer months, it emerged that corporate income tax revenues were higher than expected. As a result, the budget has been reversed: instead of losing money, the Confederation will have a surplus of just under 800 million francs. It is a significant upward correction of about CHF 1.5 billion from the
Where does this increased revenue come from?: The largest revenue comes mainly from corporate income tax. This tax depends on the profitability and profits of Swiss companies. If companies make higher than estimated profits, tax payments on the profit also increase. The cantons, which collect the cantonal tax on profits, already told the federal government at the beginning of the summer that revenues would be better than expected. This allowed the Federal Council to correct the federal projections upwards.
Will the surplus be used to reduce taxes or fees?: No, the surplus of the 2026 ordinary budget is not intended for reductions in taxes or income taxes. Instead, the Federal Council has already earmarked a significant part — 970 million francs — for additional credits for armament and air defence. The remainder of the surplus serves to balance the overall budget and to ensure a conservative management of federal public finances, in preparation for the 2027 budget.
What is the 470 million earmarked for the Cantons for Ukrainian refugees?: This is an extraordinary expense of the Confederation. In the 2026 extraordinary budget, the Confederation estimates to transfer 470 million to the Cantons as extraordinary contributions for the support of persons seeking protection from Ukraine. These funds help the Cantons cover the costs of reception, social assistance and basic services for Ukrainian refugees. It is a separate item from the ordinary financial statements and remains stable at 470 million.
Why does the SNB distribute more profits than expected?: The Swiss National Bank (SNB) manages Switzerland's gold reserves, carries out market operations and applies monetary policy. The SNB's balance sheet is subject to changes due to interest rates, fluctuations in gold and foreign currency prices, and investment returns. In 2026, the SNB was able to distribute 300 million francs more than budgeted, helping to strengthen the extraordinary budget of the Confederation and reporting a solidly positive management of national reserves.