Retail / local distributor



With retail is normally meant the selling of goods to endusers, whereas distribution normally refers to the supply of goods to other businesses. Basically, the same rules of Swiss VAT in connection with the supply of goods apply on both types of transaction. However, due to the nature of distribution the transactions that may take place can be more complex, for example when chain transactions occur or when different customs regulations are used.



Article 7 Par. 1 letter b Swiss VAT Act determines that the place of supply of goods is the place where the transport or dispatch of the good to the customer or to a third party on his instructions begins. Article 10 Swiss VAT Act lays down the conditions for VAT liability, which depends among other on the realizing of domestic turnover. Article 11 Swiss VAT Act regulates the option of voluntary VAT registration.
In VAT Info No. 6 the Swiss tax authorities have laid down their administrative practice rules about the Place of supply, among other in connection with supplies of goods. The Swiss customs authorities published administrative practice rules in Notice 52.01 on VAT on import of goods respectively in Notice 52.25 on The place of supply and the person qualifying as importer at import.



  • voluntary VAT registration: a foreign company that sends goods from abroad to recipients in Switzerland, but wants to act as local retailer/distributor, will have to register voluntarily for purposes of Swiss VAT in order to be able to do so. Namely, under the standard Swiss VAT regime for VAT liability the rules regarding the place of supply of goods would imply that the foreign company would -from Swiss VAT perspective- make a supply abroad (in the foreign country where the shipment begins), and the recipient of the goods would be considered the importer for purposes of Swiss VAT. With a voluntary Swiss VAT registration the foreign company will be able to act as importer and treat the sale to the Swiss recipient as (subsequent) domestic supply. The VAT at import paid by the foreign company -in its quality as importer- can be deducted in the periodical Swiss VAT return -provided the conditions have been fulfilled.
    The voluntary VAT registration is an ideal facility for foreign companies, for example with online shops, that for commercial reasons do not want to bother their customers with import formalities. Furthermore, a VAT registration offers the foreign company the possibility of (a better) control of the supply chain or a limitation of the costs of customs handling (see next item).
    As Swiss VAT registered taxable subject, a foreign company that regularly imports into Switzerland can benefit from the Centralised Settlement Procedure for customs (‘ZAZ’). That facility will allow to postpone the payment of VAT at import with a maximum of 60 days. In order to use the CSP facility, the foreign company will have to arrange a security on behalf of the Swiss customs authorities. That security must be distinguished from the security that is necessary to register as foreign company for purposes of Swiss VAT.
  • VAT at import: the advantage of being able to act as importer for purposes of Swiss VAT/customs is not limited to the commercial advantage that Swiss customers do not have to take care themselves of the import formailities -often a ground to refrain from purchasing abroad. As importer the foreign company can combine various shipments to various recipients in one single import declaration for shipments, and thus save compliance costs. These savings could be even higher, namely when the foreign company is able and decides to handle the customs declarations itself by using the facility of electronically submission of Swiss customs declarations.
    A foreign company that acts as importer for purposes of Swiss VAT will be able to recover the levied VAT at import. To that end it must keep record of the original customs documents that are issued by the Swiss customs authorities, the so-called tax decisions (‘Veranlagungsverfügungen MWST’ or ‘Décision de taxation TVA’).
  • warehouse: a foreign company that acts as local retailer/distributor, and in that scope has registered for purposes of Swiss VAT, can maintain a warehouse in Switzerland for distribution purposes without the risk of having the warehouse qualifying as fixed establishment within the Swiss tax territory. Namely, Article 5 Par. 3 Swiss VAT Regulation (‘MWSTV’) determines that a plain distribution warehouse does not qualify as a fixed establishment.
  • consignment stock: under the standard Swiss VAT regime for the supply of goods, the subsequent supply of goods from a warehouse in Switzerland, to which the goods upon their import in Switzerland had been shipped, is treated a domestic (i.e. within the Swiss tax territory) supply of goods. However, Article 4 Swiss VAT Regulation (‘MWSTV’) determines that in case of supply of goods that have been brought from abroad to, and subsequently will be delivered from, a warehouse within the tax territory, the place of supply will be abroad when the recipient of the supply and the consideration to be paid are known at the time the goods are brought into the tax territory, and at the time of the supply the goods have been released for free circulation. That provision allows a foreign company to maintain a consignment stock within the Swiss territory without becoming liable for VAT at import or in connection with the supply of goods from the warehouse. Of course, the foreign company can alternatively opt for voluntary VAT registration for purposes of Swiss VAT, with all consequences regarding the VAT treatment at import respectively the domestic supply.
  • distribution center: foreign companies also use Switzerland as location for their international or European distribution center. Depending the customs facilities they apply for, at import goods are either placed in a bonded warehouse or released for free circulation with subsequent storage in a warehouse. After that, the foreign company can make shipments to destinations abroad whenever it likes. The registration for purposes of Swiss VAT secures that the foreign company can recover the Swiss VAT that has been levied at import. Depending the height of the annual average tax credit, a foreign company may qualify for the facility of deferment of VAT at import -which is a huge benefit for the liquidity position of the company.
  • guarantee obligations: for a particular group of foreign companies it suffices to sell goods to recipients in Switzerland by shipping those goods to Switzerland, without the need of a registration for purposes of Swiss VAT. Under such circumstances the Swiss recipient will act as importer for Swiss VAT/customs purposes. It can happen that in the scope of quarantee obligations with the Swiss customer, the foreign company must commission a local Swiss supplier in order to fulfil its quarantee obligations. Generally speaking, the Swiss VAT that the local subcontractor charges to the foreign company can be recovered by the latter -by applying the regulation for refund of Swiss VAT to foreign companies-  provided the foreign company does not charge the Swiss customer the supply made in the scope of the quarantee obligation.