Switzerland LVCR

In an effort to stop non-resident companies from having an unfair tax advantage, Switzerland opted out of the EU’s Low-Value Consignment Relief (LVCR) on January 1, 2019. LVCR is a VAT tax exemption on low-value imports.

Determining low value 

A low-value import is anything sold cross-border with a value under 22 EUR in the EU, and 65 CHF in Switzerland.

Who the LVCR changes impact 

This impacts your business if you have a distance selling threshold or import more than 100,000 CHF of low-value consignment into Switzerland. Once you’ve crossed that threshold, you are considered a domestic supplier and will have to register for Swiss VAT and begin charging federal and state VAT on all sales.

The 100,000 CHF threshold only applies to low-value shipments that were previously VAT-free, so if your sales on items less than 65 CHF never exceed 100,000 CHF, then there’s nothing to do.

Once you exceed 100,000 CHF only from sales of items valued less than 65 CHF, you will then need to begin charging VAT the following month on those items. For example, if your fashion business sells into Switzerland, your goods would be broken into two tax categories: those more than 65 CHF, and those less than 65 CHF. If you sold 500,000 CHF in sales a year, but only 30,000 CHF came from a low-value (under 65 CHF price of 5 CHF VAT) goods, that portion of your business would still be tax-free.

Previously, LVCR acted like a de minimis, where goods valued under certain thresholds were tax-free. VAT was only applied above a certain amount:

• Goods valued above 65 CHF are taxed at the standard 8.1% VAT, or once the tax amount is above 5 CHF.
• Reduced rate items, such as food and books valued above 200 CHF, are taxed at 2.5% VAT, or once the tax amount is above 5 CHF.

If you need help determining if you are over the threshold, contact us.

If you’ve exceeded the threshold 

1. Register with the Swiss VAT authorities: Regardless of when you exceed 100,000 CHF, you will need to register for Swiss VAT for the following month (i.e. if you hit 100,000 CHF in sales in March, you will register and begin paying VAT in April.) Get started with an online questionnaire with the Swiss government.

   1. Standard Swiss VAT is 8.1%
   2. Reduced VAT is 2.5% for foodstuffs, water, and books.

2. During registration, make sure you receive information about updating your shipping documentation as a VAT registered importer, and what additional information you might need to include on customer invoices.

   1. Note that once you are a VAT-registered seller, you will be added to a list created by the Swiss Federal Tax Administration that will allow your parcels to clear customs much faster.

3. Appoint a fiscal representative in Switzerland, and provide cash or bank guarantee for VAT liabilities. Once you’ve registered with the Swiss Authorities, there are many companies that can offer representation and answer your questions, as this is a requirement for all importers.

4. Collect VAT from your Swiss customers. It’s easiest to collect at checkout, and the VAT amount needs to be itemized on their invoice. Taxes collected need to be declared on a VAT return and paid to the Swiss Tax Administration.

   1. Zonos Checkout is a great way to easily collect VAT at checkout. We manage landed cost, localization, and compliance so you don’t have to.

5. Maintain and collect customer invoices for 10 years.

How Zonos manages Swiss LVCR 

Zonos regularly updates our Dashboard and databases with current legislation and tax and duty rates.