Most goods imported into Switzerland are subject to VAT at the rate of 6.5% (standard) or 2% (reduced). The tax is levied by the customs authorities and has to be paid immediately at the border, upon the entry of the goods into Switzerland, except where the importer has an "account" with the customs in which case payment must be made within 60 days.
Unless the importer is registered for VAT purposes in Switzerland, he is not allowed to invoice VAT to his Swiss customers and he is not able to recover the VAT paid at the border since only registered taxpayers may deduct these amounts as input tax paid.
A foreign individual or company may avoid this cost if the customer agrees that the customs formalities are in his name and for his account. This means that the importer will act as having received a request to import the goods of the Swiss customer. At the border, he therefore pays the VAT in the name of this Swiss customer, who will be able to recover the input tax if he uses the goods for his own taxable activities. Clearly, both the supplier and the client have an interest to avoid unnecessary costs.
For goods arriving in Switzerland by post, VAT is also levied by the customs authorities. However, in general, neither the sender or the addressee will be present to pay the VAT. In practice, the customs authorities occasionally request the addressee to pay VAT on imports if the VAT payable is in excess of SFrs. 5. It should be noted that the addressee does not have clear obligation to declare, for VAT purposes, goods received by mail. This is in contrast with the supplies of services received from abroad which must be declared if the recipient is a taxpayer or if the value of these services is at least SFrs. 10,000 per year.
The content of this article is intended to provide general information on the subject matter. It is therefore not a substitute for specialist advice.
Deloitte & Touche Experta - Geneva, Yvon de Coulon and Per Prod'hom, Telephone (+41 22) 788 02 46 / Facsimile (+41 22) 788 03 16.
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