Important note: various Swiss media initially thought the start date for these changes was 1 January 2017. It is is fact 1 January 2018. On 18 October 2017, Switzerland’s government postponed the start date until 1 January 2019.
Currently, most things ordered abroad and sent through the post to Switzerland that attract VAT of less than CHF 5, are waived through customs free of charge. This means if you buy clothing worth less than CHF 62.50, or books worth less than CHF 200, there is no import charge – a VAT charge of 8% on CHF 62.50 of clothing, and a VAT charge of 2.5% on CHF 200 of books, both come to CHF 5. It is important to note that freight charges are included when calculating the CHF 62.50.
This tax free online shopping will disappear on some items on 1 January 2018.
Switzerland’s parliament decided to remove the CHF 5 VAT exception for all foreign retailers generating revenue of more than CHF 100,000 per year globally. These companies, which will include popular online retailers like Amazon, will be required to charge Swiss-based customers Swiss VAT. The move is seen as an essential element of leveling the playing field for Switzerland’s online retailers.
Switzerland has three VAT rates of 8%, 3.8% and 2.5%. The main rate of 8% applies to most products. Exceptions such as food and books attract 2.5%, and a special rate of 3.8% is applied to things such as hotel charges – a full list of exceptions to the standard rate can be viewed here.
Not all bad news
The 2.5% rate charged on books and newspapers, will soon apply to their digital equivalents, such as electronic books. At the moment they are hit with 8%. By contrast, in the UK, books are VAT free, while e-books, like those for the Kindle, attract VAT of 20%.
In addition, those pesky customs clearance fees could be a thing of the past. Currently, if you order something above a value of CHF 62,50, including the cost of postage, then it must be processed and have the tax collected. Swiss Post charges CHF 11.50 or CHF 16.00, depending on the parcel’s origin, plus 3% of the goods’ value, for its time and effort. For example importing CHF 70 of clothing from the UK would attract a total charge of around CHF 25, around three quarters of it Swiss Post’s processing charge.
After the rules change, foreign-based online retailers will charge customers Swiss VAT at the time of purchase, so there will be nothing for Swiss customs to collect, no individual package processing to be done, and no administrative charges. For example, a package costing CHF 100, attracting 8% VAT will cost CHF 108 at the time of purchase with nothing more to pay. Currently, the same package coming from the US cost CHF 100, at the time of purchase, CHF 18 (16 + 3%), in processing fees, plus CHF 9.52 TVA ((100 + 16 + 3) x 8%), a total of CHF 128.52. So for this purchase the new system will cost CHF 20.52 less than today.
It is worth noting that there are some goods, which, in addition to TVA, attract customs duty. Books and clothes from most places do not, but some things do – Swiss custom’s tarif database sets out all of these duties. Imports attracting customs duty over and above VAT will still require processing.
So under the new rules, small online orders from retailers abroad that are popular in Switzerland will cost more, but larger orders from these same retailers will cost less. And for these orders it will mean no longer tinkering with the order and guessing at customs exchange rates in order to slide limbo-style under the CHF 5 VAT exemption threshold.
These changes will not affect the customs exemptions on goods brought in with you when you enter Switzerland. For this see: Swiss customs information.
VAT to be charged on all online purchases (in French) – Take a 5 minute French test now
VAT rates (in French)
Customs duty database (in English)
Swiss post charges explained (in English)