Switzerland on the low-value consignment stock relief

Switzerland has announced plans to withdraw the low-value consignment stock relief.

When is usually the relief scheme applicable?

This relief is generally applicable in the European Union and Switzerland has traditionally mirrored the EU simplification. According to the EU rules, businesses established outside the EU and selling goods through the internet must charge import VAT on these goods when the value of the shipment exceeds a certain threshold. Member States have the option of setting this threshold on any value between €10 and €22, with most countries option for the second option. This means that any shipment from outside the EU sold to a non VAT registered EU customer and below €22 may be sold free of VAT. This simplification is called Low Value consignment relief. It should be noted, however, that customs duties and excise duties may still be due in these shipments.

What are the implications of these changes?

Switzerland has now put an end to their low value consignment simplification on the grounds that it creates a competitive advantage against those businesses selling the same goods intra-EU or even locally, as they are always required to charge VAT on these sales. This change will oblige all businesses selling online goods to individual customers in Switzerland to register for VAT in the country.

The EU is currently considering eliminating this relief on the same grounds as Switzerland. Although an official publication has not been made, we expect these changes to be announced in 2017.