for foreign companies doing business in Switzerland
In control of cross-border trade
indirect tax + customs + trade law compliance for your business processes
Planning is a task you perform in advance - not afterwards
Swiss cross-border trade regulation compliance assumes planning.
Regardless whether a foreign company acts as supplying or as buying party, the company must have timely knowledge about the applicable Swiss regulations. None-compliance with the rules causes additional costs and often frustrates customer relationships.
Regularly, not sooner than when arriving at the border, or when actually performing the activities at hand, or after closure of the transaction(s), foreign companies become aware that the legal consequences are different from what was thought they would be.
Importing in / exporting from Switzerland triggers all kind of legal consequences. Customs formalities have a kind of "point of no return". Beyond that point there are only limited options for redress.
Know who must or can act as importer/exporter, what is to be included in the customs declaration and what other issues need to be thought of.
The Swiss tax system is not necessarily the same as systems of other countries. As a foreign company you cannot assume that reverse charge (VAT) exists or will apply, nor that the liability for other indirect taxes is the responsibility of the local contract party.
Indirect taxes are called "indirect" because of the way and of whom they are levied, meaning that these taxes will become costs when not correctly anticipated.
Civil~, commercial~, labour law
Legal liabilities or obligations seldom come alone. Depending the activity a foreign company wants to perform in Switzerland, its legal position under Swiss law will be determined by various regulations. As commonly the case, such regulations will force a foreign entrepreneur to become active even before goods have passed a border or services have been rendered.
Not only customs or tax regulations as such can give rise to barriers to trade. Also administrative procedures or legal requirements can effectively work as hindrances to trade.
Import licenses and their conditions for obtaining them, stricter standards for foreign companies in comparison to locally based companies, lack of transparent regulations, or reluctance of entities involved in the enforcement of regulations to requests for clarification or information, are examples of potential non-tariff barriers to trade.
Swiss customs offers the facility of postponed payment of Swiss VAT at import with 60 days, and also enables the self management of the import documents.
Foreign retailers selling goods to customers in Switzerland will become compulsory liable for Swiss VAT when the turnover with so-called small items (= Swiss VAT at import max. CHF 5) exceeds CHF 100'000 annually.
Not the chosen incoterms but rather the Swiss customs and VAT provisions will determine who is regarded as importer. Be aware which transactions require the foreign supplier to act as importer, and why.
Business activities in Switzerland that require sending employees or independent workers to Switzerland, are an additional challenge that can be managed -provided the necessary preparatory steps are (timely) taken.
Complying with regulations that apply at border crossing or domestic transactions implies that your company not only must have a clear understanding of what happens at each stage of the supply chain, but also that it is able to control each step of the supply chain. Experience shows that a company cannot do without a single reference manual.
When application of special customs facilities for temporary import is useful or necessary, it is important to know what to expect in terms of advantages (e.g. ATA-carnet), obligations (security) or tax treatment (e.g. afterwards levy of VAT at import on so-called rental value).
A VAT registration may be needed or recommendable depending the undertaken business activities. This issue will also rise when supplies of subcontractors are only recharged.
A common misunderstanding among foreign suppliers is to expect a reverse-charge mechanism similar to those found in VAT systems of various EU member states.
Customs formalities in connection with flows of goods are documented procedures, and need to be prepared in advance and supervised afterwards.
the legal framework is constantly developing
be aware of the changes that will effect foreign companies' business activities in Switzerland
Upcoming changes 2024 - Swiss customs
As of 1 January 2024, the normal customs duty rate for industrial products will lowered to 0%. This will make imports for.....Read more
upcoming changes 2024, 2025 - swiss vat
As of 1 January 2024, the tax rates will change to 8.1% (standard rate), 2.6% (reduced rate) and 3.8% (accommodation). Furthermore,....Read more
posted workers - changes as of 2023
Foreign companies that post workers to Switzerland, or use subcontractor that do so, should take notice of the extended liability that has come into effect.....
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Do not send unsolicited offers for supply of services or goods, as these offers will be ignored.
VAT plus GmbH
+41 31 312 27 54