The e-commerce customs regulations of Switzerland

Switzerland customs regulations - an agony

For hundreds of years there has been one element of traditional trade which has remained unloved—customs.

Anyone who exports containers of goods to distant destinations will inevitably become familiar with this complex issue. Larger trading companies even employ internal or external specialists who specialise in this area.

However, this is not necessarily possible in the still relatively young field of cross-border e-commerce. Inexperienced traders and in particular Swiss shoppers are often overwhelmed by the complex rules and regulations surrounding customs regulations in Switzerland, not to mention import turnover tax.

Unfortunately, no one who exports to the Swiss Confederation can avoid getting to grips with the taxes and customs Switzerland imposes.

Located in the middle of Europe and surrounded by EU member states, Switzerland is now a customs island, but also an e-commerce pearl. For online traders, the biggest obstacle is no longer the Alps, but the Swiss customs regulations. Many EU traders are simply no longer accustomed to dealing with this issue when exporting their products due to the freedom of trade within the EU. But every online shop is well advised to take a good look at the topic of Swiss customs—from its own perspective and also from that of the customer.

An optimal handling of customs in Switzerland brings considerable cost and time savings for you as a trader. Lower costs and streamlined processes improve the customer experience, as well as massively increasing the first delivery rate. Customs clearance therefore has an indirect positive or negative effect on your key figures.

All of this has a positive effect on your e-commerce KPIs.

The most important positive effects:

• Increase of the repeat purchase rate
• Increase of the referral rate
• Higher purchase completion rate (conversion rate): If you prominently promote on various platforms that the Swiss customer has already paid all taxes and fees at checkout. This offers a very important competitive advantage. Further details can be found in the blog „DDP Logistics“.
• Higher click-through rates with digital advertising measures (click-through rate): If you mention in your Facebook account or in the Google Ads that taxes and fees are included in your checkout, you are one step ahead of the competition.

If you want to market your products in Switzerland successfully, this guide on regulations concerning customs in the country is a must read. To compliment this guide, we’ll be linking to relevant blog articles throughout. Learn everything about Switzerland and customs regulations.

This is how you optimise your customs burden and customs clearance costs

You probably know the term from traditional commerce: Incoterms, or International Commercial Terms, stands for "International Trade Terms".

There are currently eleven of these voluntary clauses for the handling of international trade in goods. These are summarised as Incoterms 2010. However, only two Incoterms are relevant for e-commerce – DAP and DDP. In this context we will explain postal versus commercial customs clearance.

Commercial customs clearance is again available in two variants: individual and collective customs clearance, which offer advantages and disadvantages depending on the product portfolio and consignment profile. You will learn more about this later.

DAP customs clearance - rarely the optimal solution

With DAP you hand over your shipments to a delivery service provider who also delivers the goods to the customer in Switzerland. The crucial thing is that you also leave the customs clearance to this partner. Your service provider either pays customs itself or hands over the items to Swiss Post for customs clearance. This is where the exemption limits come into play.

The majority of cross-border e-commerce merchants choose this option and send their goods DAP, which stands for "Delivery at Place". That is to say:

• In case of a delivery on the basis of DAP, the seller is responsible for the delivery of the goods, including the transport costs, to the named place of destination at the buyer's premises. Explicitly excluded are the costs of carrying out all import formalities or formalities relating to import duty in Switzerland. This is the responsibility of the buyer. Therefore, the recipient pays all duties related to the import in Switzerland and the import sales tax.
  
  

For the Swiss shopper/receiver this means:

• If Swiss VAT and/or customs duties are above the exemption limits, the customer must pay all duties at the front door upon receipt of the shipment. If he is not present when the shipment is delivered, or if he is unable to pay the outstanding value-added tax (VAT), the shipment will be notified for collection.

Why DAP is rarely the best solution

DAP: a low-cost solution for shopping baskets below the exemption limits

For you as an e-commerce merchant, it may well make sense to send your goods to Switzerland using the Incoterms DAP.

However, this is only true for cross-border e-commerce under certain conditions. As the above definition explains, your customer is basically responsible for any Swiss VAT. Like most other countries, Switzerland has exemption limits for VAT. We'll tell you where they are in a moment.

Why do we even mention the exemption limits? If your shopping baskets are always below these exemption limits, you should use the Incoterm DAP. This will probably be the most cost-effective option for you and therefore for your customers. If the goods or customs value of your product portfolio is below the exemption limits, there are no fees for postal customs clearance. Therefore, DAP logistics or postal customs clearance are the first choice here to meet Swiss customs regulations.

DAP: the worst solution for shopping baskets above the exemption limits

If you send your goods with the DAP Incoterms, this will have negative consequences for shoppers whose shipments are above the exemption limits. Because Swiss customs regulations are as follows.

• Costs: If you are shipping from the neighbouring countries of the Swiss Confederation, your customer will have to deal with additional charges of around 15 CHF due to the customs clearance costs in Switzerland. If he orders from further away, these additional costs are around 20 CHF.
• Customer Experience: As already explained in the definition of the DAP Incoterms, the C.O.D. procedure applies in this case. C.O.D. stands for "Collect On Delivery". This means that your customer has to pay Swiss VAT and postal customs clearance fees, after ordering from you. Not an ideal experience for your Swiss customers.

DDP in Switzerland: costs more, but can also do more!

The DDP process is about the transfer of your goods to Switzerland. More on this.

You must export the goods from the country of origin in a customs-compliant manner and then import them into Switzerland. Once this customs clearance process is complete, your shipments are fed into your logistics provider's delivery network. This may sound difficult at first, but with a professional partner like the Swiss Post it is a manageable investment of time and money.

At some large online retailers, DDP logistics is already part of customer experience management due to its positive influence on e-commerce key figures.

The Incoterm DDP stands for:

• In the case of delivery on a DDP ("Delivered Duty Paid") basis, the seller delivers the goods at his own expense and risk to the destination in the country of import. In doing so, he must complete all the necessary formalities. In addition to all costs, the seller shall also bear all import duties or customs costs for Switzerland. DDP formally corresponds to the DAP shipment plus customs and tax processing.
  
  

DDP Incoterms: too expensive for shipping goods below the exemption limits!

As you have learned above, there are no postal customs costs for Switzerland for shipments below the exemption limits. This is not the case with the DDP approach. Commercial customs clearance takes place here, which is handled by a service provider. Since the latter also provides its service when the shipment is below the exemption limits, costs are also incurred in this case.

These costs vary depending on the method and structure of the shipment. The decisive factor is how much and how many different goods you send. In contrast to the DAP variant or postal customs clearance, you as a trader have to bear these costs.

The logical conclusion: If your shipments are almost exclusively below the exemption limits, shipping according to DDP Incoterms is a waste of time!

DDP Incoterms: perfect for customers who order goods over the exemption limits

With this solution you bear higher costs than with postal customs clearance. Your customers, on the other hand, benefit by paying much less. For them, this type of cross-border e-commerce customer experience is perfect.

As an e-commerce merchant you can price your additional costs for commercial customs clearance at the checkout—around CHF 2.50 per shipment, but varying strongly depending on the volume. With a larger volume, the costs can also be significantly lower.

Customs regulation and value added tax in Switzerland

Release limits

Here is some important information for you on import sales tax for Switzerland and VAT. Like every country, Switzerland also has exemption limits for the import of goods.

You can find out all about VAT and its regulations as well as different solutions for delivery processing in our blog.

Regulations on import turnover tax in Switzerland or on the exemption limit/value-added tax exemption limit

If the transaction value, i.e. the value of the goods and the freight costs, is less than CHF 62.- (products with a VAT rate of 8.1%) or less than CHF 192.30 (products with a VAT rate of 2.6%), the VAT would be less than CHF 5.- and would therefore not apply.

Please note: The transaction value is always made up of the value of the goods, the transport costs and any customs clearance fees.

An important note: the VAT revision

Please also note that a VAT revision came into force in Switzerland on 01.01.2019. This change in Swiss VAT law is only relevant for traders who generate sales of more than 100,000 CHF with so-called "small goods". They must now register in Switzerland and pay all VAT. In this case, VAT must also be paid in Switzerland, which would actually no longer apply due to the exemption limit of CHF 5.-.

The exemption limit rules at customs in Switzerland

Similar to VAT in Switzerland, customs duties of less than CHF 5 are also eliminated. Since 2024, however, customs duties have been waived for most items anyway. 

Commercial collective customs clearance

With collective customs clearance, you deliver your individual shipments consolidated by freight. If customs clearance is carried out by a customs agent, all individual consignments are cleared as one shipment in accordance with the customs regulations in Switzerland.

Here is an example: Assuming you are sending one hundred consignments, each of which has a value of CHF 55, i.e. CHF 55,000. If the VAT rate for this product is 8.1%, an amount of CHF 5,500 × 8.1% (= CHF 445.50) is due in import VAT.

Commercial individual customs clearance

With individual customs clearance, you still deliver your individual shipments consolidated by freight but, in contrast to collective customs clearance, the customs agent clears all shipments separately.

Let's stick with the example just mentioned: You send a hundred consignments, each with a value of CHF 55. Here, each consignment is considered separately. Customs therefore only uses CHF 55 as the basis for the VAT calculation. The import VAT would theoretically be CHF 4.45 at a rate of 8.1%. However, as this amount is less than the Swiss duty-free allowance (CHF 5.-), CHF 0.- is also due in this case.

Please also note the VAT revision here! If you turn over more than CHF 100,000 in Switzerland, you must register and pay ALL VAT amounts! You can then reclaim the import VAT that was paid twice.

Proper customs clearance: this is how you push marketing and KPIs

For most merchants, conversion, referral and repurchase rates, and cost per acquisition are the key performance indicators (KPIs).

For most shoppers, a positive overall shopping experience stands and falls with the quality and trust in the logistics of the supplier. This is particularly true in cross-border e-commerce and all the more so when customs clearance processes are involved. From a shopper's point of view, the following points are particularly relevant for a successful shopping experience:

• delivery time;
• type of customs clearance (DAP vs. DDP customs clearance);
• delivery punctuality;
• network infrastructure; and
• returns solution.

This is especially true for cross-border e-commerce, and the shopper will check your website for these factors meticulously before completing a purchase.

How does the logistics here affect your success?

We concentrate on the most important point for your export to Switzerland—customs clearance. With the optimal customs clearance according to the customs regulations in Switzerland, your successful cross-border e-commerce trade stands and falls in the Swiss Confederation.

On the one hand, you inspire your Swiss customers with a customer-friendly DDP customs clearance procedure and motivate them to recommend you to others or to buy again. On the other hand, your logistics for DDP in Switzerland during the customer acquisition process will make you stand out from the competition.

You can find everything your Swiss customers want so that they recommend you to others in our blog.

This is how e-commerce import customs clearance into Switzerland works!

You can even perform DAP customs clearance without IT. In the simplest version, only a CN22 or CN23 document is attached to the broadcast.

On the basis of this document, the postal employee or customs officer can identify the contents of the consignment and pay customs duties in accordance with Swiss customs regulations. In addition to a brief product description, you must enter other customs-related data on the CN23 label.

You can also purchase the CN23 as a template and fill it out by hand. This simple procedure is suitable for traders who only send a few items to Switzerland. In the professional version, a shipping label is printed that also displays the CN23 document mentioned above.

The DDP customs clearance/commercial customs clearance

• With DDP customs clearance you carry out two customs clearance processes. Since you are exporting goods from your country of origin, export customs clearance and import customs clearance is required for the subsequent import into Switzerland. For export customs clearance, a commercial invoice and a collective export customs clearance are usually sufficient.

Your tasks in handling the import customs into Switzerland using Incoterms DDP customs clearance or commercial customs clearance:

In this case you have to transmit the information relevant for customs clearance to a customs agent. This customs agent is often provided by a forwarding agent; however, he can also be a separate service provider.

The customs officer uses your data to import the goods in accordance with Swiss customs regulations, but there are different variants. You can clear customs on your goods when you cross the border, or—and this is the better option—while your goods are on their way to Switzerland. Our blog article, "Importing e-commerce goods into Switzerland in conformity with customs regulations", shows you what you need to bear in mind.

Two things are important in this approach:

1. The transfer of your data via CSV file or API interface.
2. Timely communication with all parties involved, announcing your shipments in advance. All that is needed is an e-mail with the shipment information to the service providers involved - e.g. when the goods will arrive and in what quantity.

Customs with brains: Opportunities and challenges

Do the value and shipping costs of your shopping baskets often exceed the allowance for Switzerland? If so, you should think about investing in DDP logistics! If you take over the value added tax for your Swiss customers, this will deliver many advantages in terms of e-commerce. You will find that your company and your KPIs benefit enormously from this.

This applies to all transfers to which the customs regulations in Switzerland apply:

• for customs clearance between Germany and Switzerland
• for customs clearance between Switzerland and Germany
• for customs clearance between Austria and Switzerland
• for customs clearance between Switzerland and Austria
  
  

"Customs clearance included" offers you the following tangible benefits:

• Potential customers are more likely to click on your ads if you promise that the import duty into Switzerland and VAT are already included.
• Potential buyers are more likely to make a purchase if you constantly assure them while they shop on your site that customs clearance duties and VAT in Switzerland are already included in the purchase price.
• Buyers are more likely to buy a second time if they do not have to pay customs clearance duties and VAT at the front door.
• Your buyers will recommend you to family and friends much more often if they don't have to pay customs clearance duties and VAT on delivery, as they usually do.
  
  

Discover how easily annoying customs formalities can be turned into a competitive advantage!