Switzerland follows EU's lead in imposing obligations on digital platforms and marketplaces for low-value imported goods sold by third-party sellers. These platforms are responsible for charging and remitting VAT to consumers. The VAT Act revision was approved in June 2023.
However, the regime does not apply to digital services sold on marketplaces, which contradicts EU policy.
Currently, imported goods valued under 65 CHF are exempt from VAT. Any e-commerce seller earning over CHF 100,000 must register for VAT in Switzerland to charge local B2C sales. However, the Federal Tax Administration lacks enforcement powers, leading to significant evasion. This gives an unfair advantage to non-resident e-commerce sellers in Switzerland.
This VAT regime is nothing new in the world of marketplaces in Europe. However, Switzerland is late to the party, even way later than the United Kingdom that enforced that goods sold to the UK by a foreign seller and facilitated by a marketplace falls under the VAT regime.
Furthermore, there is no sign of progress in relation to DAC 7. Long time ago (for a marketplace lifetime perspective), the EU issued a new tax directive, DAC 7, that extends the EU's standards on tax transparency.
