Crossing the Swiss border: changes, customs and taxes in a fast-growing market

Starting a business in a different country is never easy. One of the requirements for Switzerland is that you have to be a Swiss resident, or have a Swiss legal entity or have a Swiss partner. It is also essential that you understand the legal structure.

Taxes for online retailers

In order to directly charge the Swiss VAT to Swiss customers, a foreign online retailer will have to be declared as a VAT-registered company in Switzerland. To achieve this, they will need fiscal representation there.

Being registered as an online shop for VAT purposes, without a permanent establishment but through fiscal representation, has the following consequences:

• The delivery is viewed as domestic and is therefore subject to the domestic tax for the supplier.
• The foreign online merchant will be considered as an importer and must pay the import tax accordingly. The standard 7.7% will be invoiced to the domestic customer as it would be for a normal Swiss company.

Value-added tax

When registering for VAT purposes, online merchants must indicate that they will act as an online retailer. They will also have to comply with being published on the list, which avoids complaints and burdens from customers.

Import tax

The standard tax rate in Switzerland is 7.7% at the moment, which is the same as on domestic purchases. Daily necessities, or basic needs such as food, are subject to VAT at the rate of 2.5%.

Import taxes can be claimed as an input tax, under certain conditions, which is the opposite of customs duties. If it is not possible to pay monetary value when importing an item, the import tax will be based on the market value of the product. The day before declaration, foreign currencies will be converted into Swiss Francs at the exchange rate of that moment.

Customs

Every import needs (at least) one invoice, which has to contain the following information: name and address of the exporter and importer, delivery address, place and date of issue, marking, number, quantity and type of packages, net and gross weights, dimensions of the packages, exact description of goods, preferably with customs tariff number, quantity, price, delivery and payment terms and finally,  country of origin.

Essential for import is the customs tariff number, which is used to classify a product. These numbers are established through custom duties, and import duties are determined based on this number as well.

Download the full whitepaper on Swiss e-commerce, taxes and duties below. Read a complete interview with Gerrit Schröder from GJS Consulting in the latest instalment of Cross-Border Magazine. 

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