Council of States backs extension to 2035, but National Council wants reduced accommodation rate to expire in 2027
Switzerland’s parliament is divided over whether to extend the special 3.8% VAT rate on hotel and accommodation services beyond its scheduled expiry at the end of 2027.
On 17 September 2026, the Council of States voted 31 to 9, with four abstentions, to retain the special rate until the end of 2035.
The current reduction is due to expire on 1 January 2028. A referendum on the continuation legislation would be needed before then.
However, the National Council rejected the proposed extension in June, meaning the two chambers must now resolve their disagreement.
If the National Council maintains its opposition, the 3.8% rate would expire at the end of 2027 and accommodation would move to Switzerland’s standard VAT rate, currently 8.1%.
See more in our Swiss VAT guide.
Swiss hotel VAT increase remains possible from 2028
The special accommodation VAT rate was introduced in 1996 as temporary support for Switzerland’s tourism industry and has since been extended six times. The current extension runs until 31 December 2027.
The Federal Council brought forward legislation in April 2026 that would continue the 3.8% rate until the end of 2035, following an earlier parliamentary motion supporting its continuation. However, the government itself does not support the extension.
It argues that Switzerland’s accommodation industry has recorded strong results in recent years and that continued preferential VAT treatment is no longer justified. Maintaining the 3.8% rate from 2028 is estimated to cost the federal government around CHF300 million per year in foregone VAT revenue.
The National Council subsequently rejected the extension in June by 105 votes to 75, with 15 abstentions. It also rejected a compromise proposal to raise the special rate to 5%.
Council of States backs hotel sector
The Council of States has now taken the opposite position.
Supporters argued that Switzerland’s accommodation sector continues to face pressure from the strong Swiss franc, labour shortages and international competition. The chamber therefore backed extending the existing 3.8% rate until 2035.
The issue now returns to the National Council as the two chambers seek to resolve their differences.
For hotels and other accommodation providers, this means the VAT position from 1 January 2028 remains unsettled. Unless Parliament ultimately approves an extension, the existing 3.8% special rate will expire at the end of 2027.
Current Swiss VAT rates
Switzerland currently applies:
- 8.1% standard VAT rate
- 2.6% reduced VAT rate
- 3.8% special rate for hotel and accommodation services
The accommodation rate covers overnight accommodation, including breakfast, as well as qualifying holiday apartment lettings.
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