Value added tax
As in many other countries, Switzerland also has a value added tax, which every consumer has to pay. Switzerland and Liechtenstein have a common VAT area, so that import/export or the procurement and provision of services in this community of states is treated as if it were a common country.
In this article we explain which tax rates apply to which goods or services in Switzerland and Liechtenstein.
In Switzerland, there are three different tax rates for different product categories.
Standard rate: 7.7%
The standard rate is 7.7% and is due on the purchase of the following goods:
- Use of services
Reduced rate: 2.5%
The reduced VAT rate is applied to the following goods:
- Food and soft drinks
- other goods for daily use
Special rate: 3.7%
A special rate of 3.7% applies exclusively to hotel accommodation including breakfast.
VAT on goods and services from abroad
Services and goods purchased from abroad are also subject to VAT in Switzerland. Imported goods are taxed upon importation. Services are to be declared and taxed by the recipient of these services.
Individuals living in Switzerland who purchase services from a company that is not registered for VAT in Switzerland/Liechtenstein have an exemption limit of CHF 10,000 per calendar year. If the total price for the services received in one year exceeds this amount, they must be declared by February 28 of the following year at the latest.
Examples of foreign services:
- Legal fees
- Costs for tax experts
- Transport costs for goods
- Construction, cleaning and management of a property in Switzerland by a foreign service provider
If the service is provided abroad, it does not have to be declared in Switzerland, as it is assumed that the VAT is paid in the country where the service is provided. This includes, for example, medical treatment or therapies abroad.
Indirect taxes incurred when moving
Importation of personal belongings
When moving to Switzerland, collections of art/valuables, animals or vehicles can be imported duty-free. The prerequisite is that the goods have already been in the possession of the person moving for at least six months prior to the date of the move and will continue to be in his possession. Additional household goods may be imported for up to two years after the move, provided the above requirements are met.
All items must be declared to customs upon importation. Anyone moving to Switzerland from an EU/EFTA state can prove their change of residence either with a Swiss employment contract or a deregistration from their previous state of residence. Third-country nationals must present a Swiss residence permit to customs.
What should be considered when importing pets?
If dogs, cats or rodents are imported, they must be chipped. In addition, a passport for animals is necessary, as well as a vaccination against rabies. Depending on the country the animal comes from, other regulations may apply.
Tax exemption limit when entering Switzerland
Personal items, travel catering and the fuel in the tank are considered duty and tax free when crossing the border into Switzerland. Import tax is levied on all other items, depending on their value and quantity.
Per person and per day, goods to the value of CHF 300 may be imported without VAT becoming due. If the total value of the goods exceeds this amount, the tax rate of 7.7% or 2.5% is due according to their classification.
Special limits apply if a high quantity of the same product is imported and the allowance of CHF 300 is exceeded:
- from 1kg meat/meat products: CHF 17/kg
- from 1kg/1l butter/cream: CHF 16/kg, CHF 16/l
- 5kg/5l oil, fat, margarine (for consumption): CHF 2/kg, CHF 2/l
- 5l alcoholic beverages with up to 18% vol. and 1l alcoholic beverages with more than 18% vol.: CHF 2/l
- 250 pieces/250g cigarettes, cigars and other tobacco products: CHF 0.25/piece/g
Want to know more about living and working in Switzerland and its financial implications? Contact us with a non-binding request.