Impacts on mail order business due to the partial revision of the Value Added Tax Act

The partial revision of the VAT Act aims to equalize the conditions for foreign mail-order companies with those for Swiss companies. Currently, they are favored by the waiver of import tax collection for goods of low value.

Current Legal Situation

‍Currently, goods shipped from abroad to Switzerland valued under 65 Fr. are not subject to the import tax of 7.7%. This is because the tax to be collected is under 5 Fr., the collection of which is not economically viable. Therefore, these small shipments from abroad are neither subject to VAT nor import tax. This cost advantage for the buyer makes competition difficult for domestic competitors, who must charge VAT on their products.

‍Legal Situation as of January 1, 2019

‍From 2019, mail-order companies reaching a turnover of at least 100,000 Fr. from these small shipments from abroad will treat all deliveries as domestic deliveries and thus are subject to VAT obligations. This tax liability in Switzerland results in registration in the VAT register and the associated duties and costs. However, the small shipments with a goods value of under 65 Fr. from a foreign mail-order company, which falls under this regulation, are still not subject to import tax. However, he must now charge VAT to his customers and ensure that the buyer does not suffer from double taxation through VAT and import taxes.

It can be deduced that mail-order companies, whose turnover from small shipments to Switzerland is below 100,000 Fr., can continue to deliver to Switzerland without VAT collection. And as long as the value of the goods in deliveries from these traders is under 65 Fr. and the associated import tax to be collected is under 5 Fr., the buyer in Switzerland will also continue to incur no import tax or VAT.

Further information can be found here.

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