Switzerland to move from 3 to 2 VAT rates

Switzerland has announced that it will simplify its Value Added Tax regime by moving to just 2 tax rates.

Currently, there are three VAT rates in Switzerland:

1. Standard Rate: 8% read about Swiss VAT increase in 2011
2. Reduced Rate: 3.8% hotel accommodation read about Swiss extension hotel VAT rate
3. Reduced Rate: 2.5% foodstuffs

The proposal is now to eliminate one of the two reduced VAT rates. The new rate will be somewhere between to two reduced rates, and hotels will still benefit from the reduced VAT rate – one of the lowest hotel accommodation VAT rates in Europe.