The Swiss Federal Council has decided that from 2019 online purchases made from companies overseas will be subjected to Swiss value-added tax (VAT).
The measure will come into effect on January 1, 2019. Currently, online purchases from abroad that attract less than CHF5 ($5.01) in VAT are exempt. This translates into an upper limit of CHF200 worth of books or CHF62.50 of goods that don’t benefit from a favourable tax status.
According to the VAT reform passed in 2016, all firms with turnover of over CHF100,000 will be obliged to impose Swiss VAT for Swiss customers. The Swiss VAT rate is 7.7% for most goods and 2.5% for certain items like books. The move is designed to reduce the attractiveness of buying from foreign multinationals like Amazon, whose prices are very competitive compared with high-priced Switzerland.
The measure was originally meant to come into effect from January this year. However, it was postponed to allow companies more time to prepare, especially Swiss Post.