VAT increase: the Government decides to mitigate the increase (cross-border guide)
The Federal Council has decided to mitigate the increase in VAT intended to finance the strengthening of the army.
Contesto
In short - The Federal Council has decided to mitigate the increase in VAT intended to finance the strengthening of the army. - The increase in the normal VAT rate will go from 0.8 to 0.5 percentage points. - The reduced rate for essential goods will remain unchanged. ## Key facts - What: Mitigation of the VAT increase - When: Federal Council Decision of 24 June 2026 - Where: Bern - Who: Swiss Federal Council - Amount: Normal VAT rate increased by 0.5 percentage points The Federal Council has decided to mitigate the increase in value added tax (VAT) intended to finance the strengthening of the army. Taking into account the criticisms that emerged during the consultation, the Government now proposes to temporarily increase the normal rate by 0.5 percentage points instead of the 0.8 initially foreseen and also waives the reduced rate applied to food and medicines. This will make it possible to mitigate the repercussions on low-income domestic economies, says the Executive in a note. The additional revenue generated by the increase in VAT, the statement specifies, will be allocated in full to the expenses for the armament of the army and its duration will be limited to 12 years. The increase in VAT by 0.5 percentage points will have an impact on everyday economic transactions. For example, the purchase of a TV for 2,000francs will go from costing 104 francs of VAT to costing
Dettagli operativi
The mitigation of the VAT increase is a response to the criticisms that emerged during the consultation. The Federal Council decided to reduce the increase in the standard VAT rate from 0.8 to 0.5 percentage points and to waive the reduced rate for essential goods. This should mitigate the impact on low-income household economies. The additional revenue generated by the VAT increase will be allocated in full to the army's armament expenditure. The duration of the VAT increase will be limited to 12 years, instead of the 10 years previously foreseen. This should make it possible to finance the strengthening of the army without placing an excessive burden on taxpayers' pockets. However, the VAT increase could still have an impact on Swiss households, particularly those with lower incomes. For example, according to an analysis by the Federal Statistical Office, a family of four with an annual income of CHF 60,000 could see their expenses increase by about CHF 150 per year due to the increase in VAT. This could represent a significant financial burden for families already struggling to cope with their daily expenses. In addition, the increase in VAT could also have an impact on Swiss companies, in particular those operating in the production and distribution of consumer goods. For example, according to an estimate by the Association ## Useful tools to protect your net income To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.
Punti chiave
The increase in VAT is news that has raised concerns among Swiss taxpayers. For this reason, we decided to create an online tax calculator that helps you estimate the impact of the VAT increase on your income and plan accordingly. The Swiss Federal Finance Administration (AFD) provided detailed information on the VAT increase and its consequences for Swiss taxpayers. VAT is a tax that is applied on goods and services purchased by consumers and businesses. The increase in VAT means that the prices of goods and services will increase, which could have a significant impact on the income of Swiss taxpayers. To better understand how the VAT increase could affect your taxes and income, we recommend using our online tax calculator. Simply enter some personal information, such as your annual income and family status, to get an estimate of the impact of the VAT increase on your income. For example, if you are a Swiss taxpayer with an annual income of 100,000 Swiss francs and a family of four, the VAT increase could cost you around 200 additional Swiss francs per year. However, if you live in a city with a higher VAT rate, such as Zurich or Geneva, the impact on tax increases could be even greater. In addition, it is important to consider that the VAT increase could have a different impact on Source: tio.ch
Punti chiave
[{"q":"What is the standard rate of VAT currently in force in Switzerland?","a":"The standard rate of VAT in Switzerland is 7.7%."},{"q":"What goods are exempt from VAT in Switzerland?","a":"In Switzerland, basic goods such as food, beverages and medicines, as well as essential services such as electricity and gas, are exempt from VAT."},{"q":"How can I calculate the impact of the VAT increase on my income?","a":"You can use our online tax calculator to estimate the impact of the VAT increase on your income. Simply enter some personal information and the calculator will give you a rough estimate of the impact of the VAT increase on your taxes."}]
Frequently Asked Questions
- What is the standard rate of VAT currently in force in Switzerland?
- The standard rate of VAT in Switzerland is 7.7%.
- What goods are exempt from VAT in Switzerland?
- In Switzerland, basic goods such as food, beverages and medicines, as well as essential services such as electricity and gas, are exempt from VAT.
- How can I calculate the impact of the VAT increase on my income?
- You can use our online tax calculator to estimate the impact of the VAT increase on your income. Simply enter some personal information and the calculator will give you a rough estimate of the impact of the VAT increase on your taxes.