Swiss Parliament Approves VAT Increase for 2028, Pending Referendum

On 19 June 2026, Switzerland's Parliament voted to raise VAT rates for financing the 13th state pension, pending voter approval in November 2026 for implementation in 2028.

On 19 June 2026, the Swiss Parliament voted to increase VAT rates to finance the 13th state pension, which voters approved in March 2024.

• The standard VAT rate would rise from 8.1% to 8.5%.
• The hotel sector rate would increase from 3.8% to 4.0%.
• The reduced rate of 2.6% for essential goods and services remains unchanged.

The additional pension payments are expected to start in December 2026, at an estimated annual cost of CHF 4.2 billion.

Still subject to voter approval

Although approved by Parliament, the VAT increase requires a constitutional amendment and must pass a mandatory referendum expected in November 2026. If approved, the new rates would take effect in 2028. The proposal therefore remains uncertain until the public vote.

Potential business implications

Even though the proposed 0.4 percentage point increase is modest, businesses may still need to make adjustments if the reform passes. Affected companies would likely need to update ERP and accounting systems, review pricing strategies (especially B2C), adapt invoicing processes, and assess the impact on long-term contracts.