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Switzerland Prepares For VAT Rise

by Ulrika Lomas, Tax-News.com, Brussels

14 December 2010


The Swiss Federal Administration has highlighted the fact that, in view of the forthcoming rise in the rates of value-added tax (VAT) in Switzerland, and in accordance with the Confederation’s pricing indication ordinance (OIP), sellers must clearly indicate to consumers the effective price to pay for goods and services. The VAT rise is due to enter into force on January 1, 2011.

As a result of the VAT changes, sellers are required to indicate the new prices within the three months following entry into force of the modification. To guarantee transparency and clarity, consumers must be informed of the changes within this specified timeframe by means of a clearly visible note, stating that the indicated price does not reflect the rise in VAT.

The new rates applicable from January 1, 2011 are as follows:

  • The standard rate, set at 7.6% currently, is to rise to 8%;
  • The current reduced rate of 2.4%, applied to items such as books, newspapers and magazines, food and drink , is to increase to 2.5%, and;
  • The special rate accorded to accommodation services, currently fixed at 3.6% is to rise to 3.8%.

In cases where 2011 list prices have already been published and therefore contain the old VAT rates, sellers are required to inform consumers in a clear and perfectly visible manner, by means of either a sticker or a document included in the brochure, that the VAT rates included in the price have not as yet been amended.

The administration notes that checks will be carried out by the cantons to verify that prices are correctly indicated at points of sale and advertising. Failure to adhere to the requirements may result in fines of as much as CHF20,000 (EUR15,404), as provided for in the OIP ordinance.

TAGS: compliance | tax | business | value added tax (VAT) | tax compliance | law | tax rates | Switzerland

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