(20.12.2023) Following the Swiss public's endorsement in September 2022 of the amendment to the Federal Law on Old Age and Survivors' Insurance (AVS), the Value Added Tax (VAT) is set to increase starting January 1, 2024.
The most noteworthy adjustment will be in the standard rate, rising from 7.7% to 8.1% (+0.4 points). Simultaneously, the reduced rate will shift from 2.5% to 2.6%, and the special rate for accommodation will move from 3.7% to 3.8%.
The DataUnit Competence Center recommends businesses scrutinize areas and products that might require price adjustments to accommodate the new tax burden. Possible solutions to soften the impact on customers include short-term offers, discounts, and price reductions.
Key considerations highlighted by the competence center include:
- Adhering to the timeline to ensure adjustments to the new rates align with legal requirements. Neither the billing date nor the payment date determines the applicable tax rate; only the date of service provision holds significance.
- Adapting to the new rates to implement necessary updates within accounting systems and business processes.
- Maintaining comprehensive tax documentation to ensure accurate records of all transactions (invoices, receipts, etc.), facilitating the work of tax authorities.
- Reviewing existing contracts with clients, suppliers, and service providers to determine if price renegotiation should be considered.
DataUnit's statement estimates that retail, gastronomy, tourism, construction, and real estate sectors will be particularly affected by this increase. The luxury sector and export products are expected to avoid significant sales declines.
Last modification 20.12.2023
