The e-commerce customs regulations of Switzerland:

get to know them and get ahead

Customs regulations of Switzerland

(Swiss) customs - 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.

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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 customs. 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 duties 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 customs duties 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.

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.

 

Most traders choose DAP (postal customs clearance)

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.

 

DAP customs clearance: The customer pays the customs at the door

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 or customs 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) or the customs amount, the shipment will be notified for collection.

Is DAP the optimal solution for your customers?

 

DAP: the best 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 customs duties and Swiss VAT. Like most other countries, Switzerland has exemption limits, both for customs and 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.

 

  • If you stay below the exemption limits, you and your buyers pay zero Swiss francs for customs clearance!

 

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.

  • 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 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, customs and postal customs clearance fees at the door of the postman's office. 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.

Compliance with customs regulations, making customers happy

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 Asendia it is a manageable investment of time and money.

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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.

In practice this means for your Swiss shopper or recipient:

  • Customs in Switzerland is not an issue for him. He or she does not have to pay any duties when receiving the shipment at the front door. The shipment is delivered like a national delivery!

 

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. With a larger volume, the costs can also be significantly lower.

Zollbestimmung und Mehrwertsteuer in der Schweiz

 

Release limits

Something else you need to know about are the exemption limits of Swiss customs, the import turnover tax and value-added tax (VAT). Like every country, Switzerland also has exemption limits for the import of goods. More precisely, there are two exemption limits: one relating to VAT, the other to customs duties. In both cases the limit is 5 CHF. What does that mean exactly?

 

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, the freight costs and any customs duties, is less than 65 CHF (products with a VAT rate of 7.7%) or less than 200 CHF (products with a VAT rate of 2.5%), the VAT would be less than 5 CHF and would therefore not apply.

Please note: The transaction value is always made up of the value of the goods, the transport costs, the customs duties incurred 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 (duty-free limit for Switzerland) of 5 CHF.

 

The exemption limit rules at customs in Switzerland

Similar to VAT in Switzerland, customs duties of less than CHF 5 are also eliminated. The duty to be paid in Switzerland applies per 100 kg of the respective gross weight of the goods (this therefore varies depending on the product).

 

Good to know: Individual versus collective customs clearance

As already mentioned, customs regulations in Switzerland have two variants for commercial customs clearance: individual and collective customs clearance. Which variant is better for you depends on the volume structure or the usual structure of your daily deliveries and the planned service processes.

Factors in the volume structure:

  • Amount of the average duty per 100 kg of product
  • Number of shipments per delivery
  • Number of HS codes required  
  • Average weight of individual consignments
  • Average value of goods (sum of order value, delivery costs and customs)

Factors in the service processes:

  • National or international return address?
  • Should the returns be duty paid back?

 

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’s an example: suppose you send a hundred shipments, each weighing 1kg. To simplify matters, we’ll assume that they all contain the same product with a duty rate of 4.50 CHF/kg. Since collective customs clearance combines the individual consignments, the customs officer adds 100kg to the total for customs clearance - so 450 CHF is due.

The same applies to value added tax in Switzerland. If the individual consignments cost 55 CHF each, customs (55 X 100) will take 5500 CHF as the basis for calculating VAT. If the VAT rate for this product is 7.7%, an amount of 5500 CHF x 7.7% (= 423.50 CHF) is due.

 

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 to the example just mentioned: you send out a hundred shipments, each weighing 1kg and with a customs rate of 4.50 CHF/kg. Since individual shipments are now considered separately, the customs duty in this case will be 1kg for customs clearance. So, theoretically, 4.50 CHF would be due. However, since this amount is less than the duty-free limit in Switzerland of 5 CHF, 0 CHF is actually due.

The same applies to value added tax. Let’s assume that the individual shipments again cost 55 CHF each. Here too, the broadcasts are considered separately. Customs therefore only uses 55 CHF as the basis for calculating value added tax. Thus, at a rate of 7.7%, value added tax would theoretically amount to 4.24 CHF. However, since this amount is less than the Swiss customs allowance (5 CHF), 0 CHF is due in this case, too.

Please also note the value added tax revision here. If you should turn over more than 100.000 CHF in Switzerland, you have to register and pay ALL VAT!

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?

DDP customs clearance increases customer satisfaction

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.

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 CN23 document is attached to the broadcast.

DAP customs clearance: Easier but worse for business

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 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.

With the right tool - less work

Through an interface with your web shop, the relevant customs information for the ordered items can be automatically inserted when printing the integrated CN23 label. For this to work, you must store the necessary information in your PIM (Product Information Management). This approach is a must for competitive retailers, as it significantly reduces production costs in fulfillment.

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 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 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 customs allowance for Switzerland? If so, you should think about investing in DDP logistics! If you take over customs duties and 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 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 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 duties and VAT on delivery, as they usually do.

Discover how easily annoying customs formalities can be turned into a competitive advantage! Click on the Optimizer now and Asendia Switzerland will calculate your conditions quickly!

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