New liability for non-resident suppliers to register for Swiss VAT

31 August 2017

The Swiss tax authorities have confirmed that they are amending their VAT Act from 1 January 2019 to state that non-resident mail order companies, which generate a turnover of more than CHF 100,000 of low value consignment sales in Switzerland, will have to VAT register and charge VAT on their sales in the country.

Currently in Switzerland, the Federal Customs Administration waives import VAT on low value consignments that have a VAT amount of CHF 5 or less. This allows non-resident mail order companies to avoid registering and charging VAT to their customers, even if their total sales go above the country's CHF 100,000 registration threshold.

In an effort to remove the disadvantage that this gives resident companies who sell the same products and have to charge VAT, the Swiss tax authorities have stated that from 1 January 2019 non-resident providers will have to register if their sales in the country exceed the CHF 100,000 limit.