The Switzerland Federal Council has published a dispatch proposing to extend the reduced VAT rate of 3.8% for accommodation services until 31 December 2035, but has recommended Parliament reject the extension on fiscal grounds.
The Swiss Federal Council published a dispatch on 7 May 2026 concerning a draft amendment to extend the reduced VAT rate of 3.8% for the accommodation services sector, including hotels.
Under current legislation, the reduced VAT rate of 3.8% is scheduled to expire after 31 December 2027. The draft amendment proposes extending its application until 31 December 2035.
However, the Federal Council has recommended that Parliament reject the amendment. It noted that the hotel industry is currently performing well and considered that the continuation of the reduced VAT rate is no longer economically justified.
The proposal will now be considered by Parliament, which will decide whether to adopt or reject the extension.
