Switzerland postponed its planned VAT rate increase from January 2026 to what is now most likely January 2028. The standard rate was set to rise from 8.1% to 8.8%. The 0.7% increase was designed to generate CHF 4.2 billion annually to fund a 13th monthly pension payment for retirees. The delay pushes the parliamentary approval deadline and required public referendum vote further into the future. ‍

The bottom line: Businesses operating in Switzerland now have additional time to prepare for the rate changes. Despite this postponement and a previous increase in January 2024 (from 7.7% to 8.1%), Switzerland continues to maintain the lowest VAT rate among major European countries.