The AHV 21 reform was accepted by the people and cantons on September 25, 2022, and the Federal Council set an effective date of January 1, 2024.

On September 25, 2022, the people of Switzerland accepted the Stabilization of the AHV reform (AHV 21), which includes an amendment to the Federal Law on Old-Age and Survivors’ Insurance (AHVG) and a federal decree on the additional financing of the AHV by increasing the value-added tax.

As of January 2024, the following VAT rates will apply

Value added tax rates can only be adjusted at the beginning of the year to avoid a significant administrative burden on taxpayers, and compensation funds and employers must be given enough time to implement the reform. Taking these circumstances into account, the Federal Council has set the entry into force of the AHV 21 reform at Jan. 1, 2024, at which time the ordinance on increasing value-added tax rates for supplementary financing of the AHV will also take effect. Thus, the following rates will apply from January 1, 2024:

– the standard rate will increase from 7.7 percent to 8.1 percent,

– the special rate for hotel industry benefits from 3.7 percent to 3.8 percent

– the reduced rate from 2.5 percent to 2.6 percent.

Consultation procedure on ordinance amendments

The implementation of the AHV 21 reform requires a number of changes at the ordinance level. The implementing provisions will be regulated in the Old Age and Survivors’ Insurance Ordinance (OAVS) and its annex with regard to all other affected regulatory acts. The main changes concern the following points.

Similar to the LAVS, the concept of “retirement age” will be replaced with that of “reference age” in both the OAVS and all other affected ordinances.In the OAVS, the compensatory measures for women born between 1961 and 1969 will be clarified, particularly with regard to the reduction rates in the case of early pension drawdown and the amounts of the supplement in the case of drawdown of part of the pension.Clarifications will also be needed in the OAVS as well as in several other pieces of legislation regarding flexible retirement, particularly with regard to the arrangements in the event of a change in the percentage of the pension collected.Finally, concrete provisions will need to be made so that people who decide to work beyond the reference age can choose whether to make contributions on their entire salary or only on the portion that exceeds the deductible of CHF 16,800 per year. Regulations will also be made on how the contributions will be taken into account for the subsequent calculation of the pension.

Facilitated taxation for Italian pensioners abroad

Increase in women’s retirement age

The reference age for women will be raised from 64 to 65 in four stages. Taking effect on January 1, 2024, the reference age for women will first increase by three months on January 1, 2025. The first to be affected will be women born in 1961; the second stage will affect those born in 1962, whose reference age will be 64 years and six months, which will then increase to 64 years and nine months for insured women born in 1963 and finally to 65 years for those born in 1964 or later. In this way, a uniform reference age of 65 will apply for everyone from 2028. The gradual increase in the reference age will similarly apply to occupational pension plans.

The Federal Council has put the planned ordinance changes up for consultation until March 24, 2023.