Due to the change in legislation, non-established sellers of “low-value” goods into Switzerland will be obliged to register for VAT if they generate more than CHF 100,000 (approx. USD 100,000) of sales of low-value goods per year.
Low-value goods are defined as imports where the VAT charge does not exceed CHF 5. At the currently applicable Swiss VAT rates these are shipments of CHF 65 at the standard VAT rate of 7.7%, or CHF 200 at the reduced VAT rate of 2.5%. Import VAT and customs duties are not levied upon the importation of goods if the amount of import VAT does not exceed CHF 5.
As of 1 January 2019 sellers of such goods must register for Swiss VAT purposes if their turnover from the sales of low value goods into Switzerland exceeds CHF 100,000 in the previous 12 months period. The legislative changes also entail that the place of supply shifts from abroad to Switzerland. This means that the VAT registered foreign sellers must issue an invoice to the Swiss customers applying the appropriate VAT rates. (The de minimis threshold of CHF 5 remains in place and import VAT will not be collected if it does not exceed CHF 5, but the subsequent sale to Swiss customer will be subject to VAT if the seller obliged to register for VAT purposes.)
What does it mean for you?
In order to comply with the new rules you must monitor the value of low value sales to Swiss customers to establish if you have VAT registration obligation. In the event that you already reached this threshold based on your sales in 2018, you need to register as of 1 January 2019, must be able to issue invoices with Swiss VAT and file periodical Swiss VAT returns.
For further information please contact Andras Salanki (firstname.lastname@example.org) of PwC Switzerland
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