Swiss National Council extends special VAT rate for hospitality

The Swiss National Council has voted to extend the special VAT rate for the hospitality sector until the end of 2031. The decision, passed with 101 votes in favor and 86 against, marks a reversal from a previous June vote where the chamber initially refused to consider the matter.

The special rate of 3.8% applies to accommodation services, significantly lower than the standard 8.1% rate. Originally introduced in 1996 to support the industry during a crisis, the measure has been extended six times. While some proponents suggested an extension until 2035, the National Council opted for a shorter period, citing concerns that the subsidy may no longer be economically necessary given the sector's record 44 million overnight stays last year.

The Federal Council opposed the extension, noting that the special rate results in an annual loss of approximately 300 million francs in tax revenue. Finance Minister Karin Keller-Sutter highlighted budgetary constraints, questioning how to fund other priorities, such as the military, without such tax reductions. The proposal must now undergo review by the Council of States.