Next year, changes to Swiss VAT law come into effect aiming to level the VAT playing field between foreign retailers and their Swiss counterparts.
Now, most imports of goods into Switzerland are subject to Swiss import VAT. However, this is waived for imports of goods subject to the standard rate of VAT where the import VAT due is no more than CHF 5. Practically, this means that standard-rated goods with a value of up to CH 65 and reduced-rated goods with a value of up to CHF 200 are exempt from Swiss import VAT.
Position as of 1st January 2019
The revised VAT law sets out that a foreign supplier who generates an annual turnover in the previous 12 months, from small consignments of goods into Switzerland, of at least CHF 100,000 must register for VAT in Switzerland. This is because the place of supply of the goods being supplied is shifted to Switzerland. Consequently, sellers will have to register for Swiss VAT and charge and remit the Swiss VAT due on these supplies. Import VAT will not apply to the goods when they are delivered in Switzerland.
Moreover, once a company reaches the CHF 100,000 threshold for small consignments delivered into Switzerland from abroad, all its other shipments to Switzerland, i.e. consignments with an import VAT value above CHF 5, will be deemed to be domestic supplies as well and therefore also subject to Swiss VAT.
Businesses have just over three months to prepare for this change. Please do get in touch with us now to discuss the practical implications of these new rules to your business.