Voting on September 25, 2022 – OASI (AVS/AHV) / VAT (IVA/TVA/MWSt)

By a margin of just over 31,000 votes, the people (the majority of the cantons was not necessary) approved the amendment to the federal OASI Act (OASI 21 - stabilization of the OASI).

To enable its implementation, the OASI amendment was linked to the federal decree on financing the OASI by increasing the value added tax (VAT).

The entry into force of this legislation is January 1, 2024.

Specifically, the changes for the consumer, taxpayer and those who are considering retirement or early retirement, are as follows:

Main update under VAT (LIVA)

Increase in VAT rates

• +0.4% for the standard rate (from 7.7% to 8.1%);
• +0.1% for the reduced rate (from 2.5% to 2.6%);
• +0.1% for the special rate in the hotel sector (from 3.7% to 3.8%).

Increase not limited to time.

How to deal with it?

The VAT taxpayer will have to take into consideration the moment of the supply, and/or the moment when the taxpayer performs the service. Therefore, the new rate have to be applied for supplies made after January 1, 2024 and, respectively, for services performed after January 1, 2024.

The "old" rate will continue to apply for supplies made until December 31, 2023, and for services performed before December 31, 2023, even if invoiced in 2024.

Main changes to the OASI Act (LAVS / AHVG)

Gradual increase in the reference age for women

To mitigate the increase in the reference age for women from 64 to 65, the legislative amendment provides compensatory measures for women in the transition generation, specifically:

• For women born in 1960, the retirement age remains 64;
• For women born in 1961, the retirement age will be 64 years and 3 months;
• For women born in 1962, the retirement age will be at 64 years and 6 months;
• For women born in 1963, the retirement age will be 64 years and 9 months;
• For women born in 1964 and after, the retirement age will be at 65.

The compensatory measures affect women born between 1961 and 1969, who will be eligible for more favorable reduction rates when collecting their retirement pension earlier, a pension supplement for women who collect their pension at the reference age or later, and the possibility of earlier pension collection at age 62.

Greater flexibility of pension drawdown

Possibility to advance annuity by up to 2 years or postpone it by 5 years.

Possibility of gradual transition from active life to retirement.

Incentives to continue gainful employment after age of 65

Opportunity to pay contributions on full salary to fill contribution gaps and/or improve annual determining income. (Non-application of the CHF 16,800/year deductible).

What means this for you?

For women in the transitional generation, we recommend reviewing retirement planning and taking appropriate action now.

For other insured people, these changes do not have a decisive impact on the ordinary pension, but in combination with the pension plan (Pillar 2, LPP / BVG) and individual pension plan (Pillars 3 A and B) there could be interesting opportunities for a "tailor-made" examination.

In particular, partial early retirement can be considered in combination with a continued employment after the reference age.

Retirement (or pre-retirement) planning should be done in due time, to increase the chances of improved pension conditions and benefits.

Our advisors are available for personalized assistance, in order to evaluate your pension situation according to your needs and priorities. It is very important to know your pension situation as soon as possible, so that you can consider any gaps and improve - over time - your retirement prospects.

Our multi-disciplinary team is available to consult on a multitude of compensation and retirement matters, in Switzerland and internationally. Please do not hesitate to contact our professionals.

Andersen Tax & Consulting AG: [email protected] / +41 58 123 04 20