New Tax Regulation for CH Platforms — Everything You Need to Know

Starting January 1, 2025, Switzerland will implement changes to its VAT regulations for e-commerce platforms, switching to a “deemed supplier” model. The new law will shift the obligation to collect and remit Swiss VAT on goods sold to Swiss customers from e-commerce owners to online marketplaces where the goods are posted. Do you want to learn more? Then, keep reading.

Current Tax Rules in Switzerland

Since 2019, the mail-order seller is deemed to perform supplies on the Swiss territory as soon as it exceeds the CHF 100,000 threshold of so-called “low-value goods” shipped from abroad to the Swiss territory. As such, the seller was responsible for registering for Swiss VAT and acting as an importer of the goods.

What Will the New Tax Regulation Change?

The new tax regulation for CH platforms comes into force on January 1, 2025. The regulation imposes VAT obligations on e-commerce platforms rather than sellers on such marketplaces. It does so by defining the “deemed supplier”.

Online platforms are considered deemed suppliers when they facilitate the sales of goods. This means that all marketplaces qualify as one. What are the details regarding this? Namely:

Online platforms are considered deemed suppliers when they facilitate the sales of goods between a seller and their user, using their own interface, and with the sale concluding on the platform.

• To qualify a platform as a deemed supplier, it must be analysed on a transactional basis.

• Other suppliers of goods that do not sell them per se (e.g., leasing) are not considered deemed suppliers.

• The order must be placed on such platforms and they must be aware of the final price; if the platform does not issue the invoice, there are other negotiations between the seller and buyer, such transactions are excluded from the deemed supplier model.

• It does not matter which party is responsible for the local and international delivery of goods.

• The status of the parties involved in the transaction is also irrelevant. It does not matter whether the sale is B2B, B2C, C2B or C2C.

At the same time, a platform will avoid the deemed supplier status if it:

• Isn’t involved in the ordering process (both directly and indirectly);

• Does not generate turnover directly related to the business;

• It is a payment processor only;

• It only provides space for advertisements;

• It only provides advertising services;

• It only redirects or forwards purchasers to the other platforms.

Technically, these changes impact mostly e-commerce platforms. However, we need to remember the e-commerce store's point of view. Since such platforms will be responsible for handling VAT responsibilities, they will need to implement relevant fees. Hence, it might seem to e-commerce owners that they are charged more for posting their products on such platforms, and it might be so; after all, the platforms won’t only have to collect the money to pay the VAT tax but also to cover additional costs related to fulfilling this responsibility. After all, such platforms will be obligated to provide information upon request by the Swiss Federal Tax Administration (SFTA).

This also means that online platforms now need to register for VAT tax in Switzerland. On the other hand, if you are a seller, these new changes might offer you a good opportunity: You can cancel your current tax registration in this country.

If a platform does not register for VAT tax voluntarily, it might be forced to do so. Additionally, with this new regulation, the platforms will be responsible for collecting invoices regarding the sales made on them.

What Will Not Change?

While the law greatly changes regarding who is responsible for VAT, some legal aspects remain untouched. Import VAT for low-value consignments (under CHF 62 at standard rate) still remains exempt, and platforms will still act as the importer of record. Such platforms might benefit from an import VAT deferral for high-value consignments to optimise cash flow.

We must also mention here that this new regulation does not impact the currently pre-approved VAT tax rate increase. The current draft decree, approved by the Swiss Cabinet on October 16 2024, will increase the rates from 8.1% to 8.8%. Currently, this change is planned to come into effect in 2026, and we need to remember that this is still a much lower rate than in other European countries, where the VAT tax usually amounts to 21%.

What Do You Need to Look Out For Regarding the New CH Platform Regulation?

One of the most worrying elements of this new regulation is tax liability. While platforms are obliged to file VAT tax reports and pay the taxes, sellers might still be jointly liable with the platform if it fails to comply with this new regulation.

To avoid this risk, we recommend that you sign a hold harmless clause in your agreement with the platform, as it will legally limit your liability as a seller, ensuring that you are not responsible for the platform’s compliance failures.

The Takeaway

The new tax regulation for CH platforms shifts the VAT responsibility from sellers to online marketplaces. While the regulation isn’t perfect (the issue of shared liability), it should simplify the tax collection process, enabling many businesses to deregister in Switzerland.

However, there are still aspects that you should think about, such as delivering your products to Switzerland. In such cases, you should trust a reliable shipping company such as Landmark Global. With our international shipping services for e-commerce stores, your products will be delivered on time, every time.