2024 brings about Swiss legislative changes affecting cross-border business and customs clearance for online shops.
What are the Swiss legislative changes taking effect in 2024?
Two essential import modifications by the Swiss take center stage. First, starting January 1, 2024, no import duties will be levied on industrial goods. Second, there has been a significant simplification of the Swiss tariff structure. In addition, the Swiss VAT rate will increase from 7.7 to 8.1 percent.
Concerning what prompted the Swiss to change their customs legislation, three main reasons stand out:
1. Addressing high prices: The abolishment of industrial import duties is Switzerland's response to the long-standing issue of higher average costs compared to neighboring countries. By eliminating import duties on industrial products, Switzerland is tackling key factors contributing to its reputation as a “high-price island.”
2. Strategic reduction of trade barriers: The removal of import duties aligns with a strategic move to reduce tariff and non-tariff barriers that historically impeded trade and contributed to market isolation. Tariff barriers include duties, export subsidies, or minimum prices, while non-tariff trade barriers can involve import and trade quotas. Reducing these hurdles aims to create a more open and competitive environment for businesses like online shops, facilitating better alignment of price structures domestically and internationally.
3. Harmonization with EU standards: Switzerland has committed to aligning its customs tariff structure with EU standards. Reducing tariff positions from 9,114 to 7,511 is a significant step toward harmonizing with European trade practices. Experts predict this alignment will simplify cross-border processes and promote Switzerland's integration into the broader European economic landscape.
Key changes in the Swiss customs system 2024
Elimination of industrial duties
Industrial goods in chapters 25 to 97 of the customs tariff, including consumer goods like bicycles, cars, household appliances, and clothing, will have commercial tariffs set to zero. Exceptions include a few agricultural products (such as animal feed) in chapters 35 and 38. From 2024, no customs duties will be levied on these goods, irrespective of their origin, streamlining processes significantly and easing compliance with customs regulations.
Simplification of customs tariff structure
The Swiss tariff structure is streamlined by reducing the number of tariff lines from 9,114 to 7,511. This makes for easier classification: the last two digits of the eight-digit tariff numbers can be replaced with “00.”
Preferential proof of origin
Such proof is not required if goods remain or are consumed in Switzerland and are subject to a zero-duty rate. However, preferential proof of origin may still be required if these goods are to be reexported again after processing. After import, preferential proofs of origin can be stored electronically, simplifying documentation.
VAT rate changes
VAT rates in Switzerland will increase as of January 1, 2024. The standard rate will be updated to 8.1 percent (previously 7.7 percent), the reduced rate to 2.6 percent (previously 2.5 percent), and the special rate to 3.8 percent (previously 3.7 percent).
Return of goods to the EU
The abolition of industrial duties does not impact exports from Switzerland or re-imports into the EU. However, if Swiss import cannot be proven, tasks will be imposed upon re-importation into the EU. Proper documentation prevents this, and with no import duties, there is no need to apply for a refund when returning goods to the EU.
What remains unchanged?
Existing customs procedures in Switzerland, the UK, and Germany generally remain unaffected. Further simplifications are expected in Switzerland. Companies must still declare imports and correctly categorize goods using appropriate tariff codes. The weight duty for agricultural goods (including food products) remains in place.
How e-commerce shippers can prepare for the Swiss legislative changes
Update your ERP system
Incorporate updated master data, such as customs tariff codes or origin calculations, into your systems to ensure seamless compliance with regulations.
Communicate changes
Inform all involved parties and partners about the changes to ensure they are adequately considered.
Update Swiss VAT rates
Ensure that your processes and customer invoices account for the new Swiss VAT rates from January 1, 2024.
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