VAT update – Switzerland

Pitney Bowes Compliance Team · Pitney Bowes

 1 MINUTES

Starting January 1st, 2019, the distance selling updates to the Swiss Vat Act published by the Swiss Federal Tax Administration took effect.  As part of the update, there are changes to Swiss VAT rules that required Borderfree to register for VAT and become the importer of record for all products delivered to Swiss shipping addresses.  Borderfree is required to charge, collect, and remit Swiss VAT on sales to customers with shipping addresses in Switzerland.  

As a result, all products being mailed to delivery addresses in Switzerland have: 

  • No Delivery Duty Unpaid (DDU) option at checkout
  • A 7.7% VAT applied to all customer orders
    • Note: 7.7% VAT was previously applied to customer orders above CHF 65 for import VAT purposes, and this change to the Swiss VAT rules removed this threshold such that VAT must also be applied to customer orders below CHF 65.

Actions we’ve taken:
To support the Swiss Federal Council’s recent Value Added Tax (VAT) law and increase transparency for your international customers, we began separating the “Duties & Taxes” line item included in order-related emails into two separate line items—now, customers with a shipping address in Switzerland are able to be view the exact amount charged on their order for duty and taxes, with taxes marked as a percentage of the total order.

In addition, for the benefit of these customers, we’ve added the Borderfree tax identification number (TIN) as well as the physical location of our multinational headquarters.

Here is an example of this new format:

Swiss Email Example

What these changes mean for you and your customers:

  • No action is required by you to implement these changes for transactions through Borderfree.  As the merchant of record, Borderfree registered for VAT and remits the VAT charged to the Swiss tax authorities.  The 7.7% increase is displayed in the taxes section at checkout and added to the fully landed cost.
  • Be prepared for the potential impact of any price increase on conversion rate.  To help offset the impact of a potential cost increase to the consumer, we recommend considering a 7.7% discount offer.