Mandatory tax liability for mail order companies in Switzerland

If a foreign mail-order company generates at least CHF 100,000 in annual sales from small shipments (goods value less than CHF 62 at a tax rate of 8.1% or CHF 193 at a tax rate of 2.6%) that it transports or ships from abroad to Switzerland, its deliveries are considered domestic deliveries. The company subsequently becomes liable for VAT in Switzerland and must register in the VAT register. Tax liability arises in the month following the CHF 100,000 sales threshold.

Voluntary tax liability for mail order companies in Switzerland

If a foreign mail-order company in Switzerland is not registered in the Swiss VAT register and does not have a declaration of foreign subordination and ships goods to Switzerland, the Swiss customer normally acts as the formal importer. The customer is therefore responsible for paying any VAT collected at customs, as well as any customs duties and customs clearance fees, and receives an invoice from the transport company. This can lead to a customer in Switzerland refraining from placing an order due to these additional costs – which are unforeseeable for the average consumer. With voluntary VAT registration, the foreign mail-order company can handle the import process and VAT accounting for the customer, ensuring that no unexpected costs arise for the customer. The foreign mail-order company sells its goods including the VAT owed. The final purchase price, including VAT and delivery costs, can be displayed to the Swiss customer in the online shop. This gives the Swiss customer the necessary cost certainty. This makes the offer more transparent and attractive, which can lead to higher sales figures.