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Switzerland Planning New VAT Rules For Mail Order Companies

Thursday, June 25, 2020

The Swiss Federal Council has launched a consultation on amendments to the VAT law, with a focus on the tax treatment of mail order businesses and the administrative burden on SMEs.

Since 2019, foreign mail order companies have been required to register with the Swiss Federal Tax Administration (FTA) if their sales turnover in Switzerland from small consignments – where the amount of VAT is less than CHF5 – exceeds CHF100,000. According to the Federal Council, the effect of this measure has been limited, with few foreign mail order firms registering with the FTA.

The Federal Council has proposed that operators of mail order platforms be required to declare all deliveries of goods to Switzerland made through their platform. To ensure compliance, the FTA may implement administrative measures against platforms or mail order companies that fail to register as taxpayers or who fail to comply with these new obligations. It may order an import ban for goods supplied by non-compliant companies or the destruction of those goods, and may publish the name of such companies, it is proposed.

The Council has also proposed simplifications to the process for establishing VAT accounts for SMEs, as well as concessions for foreign companies subject to Swiss VAT to facilitate compliance.