Foreign companies to pay VAT in Switzerland
Value-added tax will apply to items ordered online and shipped to Switzerland, parliament has decided. In future, foreign businesses providing goods and services inside the Swiss border will have to pay the tax.
The decision, approved by the Senate on Thursday, applies to all companies involved in the Swiss market except those who can prove they make less than CHF100,000 ($100,345) in annual profits. Orders from large online marketplaces like Amazon will therefore be also be affected by the new tax.
About 30,000 foreign companies will be made to pay the tax, which will be passed on to customers. Parliament made the decision in order to remove an element of foreign competition for Swiss businesses, who have always had to pay value-added tax on their goods and services. Profits from the new tax law are expected to amount to CHF40 million per year, which will flow into government coffers.
The government also said it will create 38 new jobs in order to implement the new tax law.
The move could have an effect on online shopping and Swiss cross-border shopping habits, which had already been increasing in the wake of last year’s decision to un-peg the Franc’s value from that of the Euro.
In general, goods and services in Switzerland tend to cost significantly more than in neighbouring countries, with a 2015 study showing that the Swiss paid CHF15 billion ($15.8 billion) more for household goods than their neighbours just across the border.
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