Who has to pay VAT when you ship from Switzerland?
Swiss VAT and exports:
general principles
VAT, or value added tax, is a tax levied by the Confederation on the consumption of citizens. For convenience, it is the Swiss companies that collect this VAT by invoicing it directly to consumers by adding this amount to the invoice.
We will not dwell here on the legal principles of Swiss VAT, what you should simply remember is that as a Swiss company subject to VAT, when you buy a service from another company, you have the possibility to get it refunded.
Switzerland applies variable VAT rates depending on the activity
- special rate: 3.7%.
- reduced rate: 2.5%.
- standard rate: 7.7%
These reduced or variable rates are applied for certain activities involving essential goods and services.
Swiss VAT and exports:
services abroad
Most countries in the world levy VAT on goods and services. So what happens if your company works abroad?
Imagine that you are sending a package to a customer abroad, Swiss law indicates that this shipment is exempt from Swiss VAT. Why? Why? Simply because once the package reaches the customs authorities of the destination country, local VAT will be charged.
This means that when you write your customs invoice when you send it, don’t forget to deduct VAT.
When you send a shipment abroad with FedEx, UPS, or TNT from Expedismart.ch and you request that a customs invoice be generated automatically from the site, it will be indicated without VAT.
It is important that the recipient is aware that VAT charges will be charged on site.
Swiss VAT and exports:
temporary exports
Temporary exports are a type of shipment that theoretically makes it possible not to pay VAT costs since the goods never really arrive on the country’s territory.
It is important to know that temporary exports are feasible but complicated to do with carriers such as DHL, FedEx or UPS.
Swiss VAT and exports:
returns of goods
For example, if a Swiss SME has to return a machine it has purchased in Germany for inspection or revision, the company receiving the package will most probably have to pay VAT on the amount indicated on the invoice.
Advice: if you return goods and the recipient company has to pay the VAT costs, tell them to pay them, they can be reimbursed by the State on a quarterly basis. On the other hand, if the recipient of the package is a private individual, he will not be able to obtain a refund of the VAT paid.
Swiss VAT and exports:
some important tips
We are here to save you time for Swiss SMEs when they send parcels abroad. Here are some tips on VAT costs and avoid unpleasant surprises:
- Advise the recipient of your shipment BEFORE sending him your package that he will certainly have to pay VAT charges at the time of delivery. Why? Why? First because if these charges are not paid, the package will never be delivered and will be returned to you at your expense (count more or less the same shipping costs as you would for the trip). At Expedismart, we do everything we can to ensure that our users do not have any unpleasant surprises, which is why we warn you.
- VAT charges are calculated by customs on the VALUE of the goods you are sending. Think then that in many countries in Europe and around the world, these costs can go up to and even exceed 20%. When you ship a package from Switzerland, be aware that the recipient may be surprised to have to pay 200 francs in VAT costs, which is why we advise you to notify them.
- It is VERY difficult to calculate in advance the VAT charges that will apply to goods that Swiss SMEs export abroad. Each country or customs zone applies its own rates and this still varies depending on the goods sent. In the best case, there is a VAT calculator, but this is very approximate.
- VAT charges are generally grouped into a larger group called “customs charges”. In addition to VAT fees, the carriers you have chosen may charge additional fees following the processing of your file. These costs vary from one carrier to another but represent only a small part of the customs costs, VAT being the most important part
