VAT now applied to most foreign online shopping from 1 January 2019

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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 and CHF 200² of books and a few other products.

Now everything sold by a foreign business with global revenue over CHF 100,000 will need to charge Swiss VAT on orders of any value. This will affect purchases made from large online retailers like Amazon.

It isn’t all bad news however. The hefty processing charges that accompany VAT charges are a thing of the past for these orders. 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, around three quarters of this is the processing fee.

The key takeaway from the change is: when ordering from large global retailers there is now no need to fret over the size of the order. You’ll pay Switzerland’s 7.7% VAT (2.5% for books etc) but won’t get hit with the nasty processing fees. However, for orders from small mom and pop shops, 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).