In 2016, Switzerland’s government decided to tighten the VAT exemption on imported purchases, a move that affects most online orders from foreign retailers. The new rules took effect on 1 January 2019 – they were originally planned for 1 January 2018 but systems and processes were not ready.
Until the beginning of this year, any order attracting less than CHF 5 francs of VAT was allowed across the border tax free. This meant CHF 64.931 of most goods, including postage costs, and CHF 2002 of books and a few other products.
Now everything sold by a foreign business with global revenue over CHF 100,000 attracts Swiss VAT regardless of its value. This affects purchases made from large online retailers like Amazon.
It isn’t all bad news however. The hefty processing charges that accompany VAT charges will a thing of the past for orders from certain retailers. These charges are one of the most costly and annoying aspects of ordering things from abroad in Switzerland. It is particularly annoying when you’ve aimed to keep your order under the CHF 64.93 threshold only to find Swiss customs applied an exchange rate that pushed the figure above the threshold, triggering a processing charge on top of the VAT. This can bring the total charge to 30% of the base price.
These processing charges are CHF 11.50 or CHF 16.00, depending on the parcel’s origin, plus 3% of the goods’ value. For example importing CHF 70 of clothing from the UK would attract a total charge of CHF 23.49. Close to three quarters of this is the processing fee.
To avoid these fees the foreign retailer, in addition to being registered for Swiss VAT, must have a customs duty collection agreement with Swiss Post – only Amazon has one so far – or another shipping company. If it doesn’t then the customer will need to pay the customs duty and processing fee separately on top of the VAT already paid.
In addition, it’s worth noting a new risk. If a retailer or their shipping company does not properly show on the package that Swiss VAT and customs duty have already been collected, the customer could be charged twice and incur the processing fees.
So make sure any foreign retailer with global revenue above CHF 100,000 is registered for Swiss VAT, has a customs collection agreement with Swiss Post (Amazon is the only retailer with one so far) or another shipping company and labels their packages correctly. Also check fine print to see if there are any processing charges.
For orders from small mom and pop shops with global revenue under CHF 100,000, for example small purchases from small retailers on Ebay, it still pays to keep orders under CHF 64.93 if possible (CHF 200 of books).
1 5 / 7.7%
2 5 / 2.5%
3 Customs duty varies depending on the product and its origin and is usually based on weight. Many items shipped from the EU into Switzerland attract no customs duty. Click here to access the Swiss customs database.