Confederation halves tax-free limit "Retailers should finally do their homework"

From January, shopping tourists will only be able to shop tax-free for CHF 150 instead of CHF 300. While retailers are pleased, the reduction in the tax-free limit is not well received by consumer protection organizations.

The tax-free limit is being reduced - and faster than expected. From January 1, shopping tourists will only be allowed to take goods worth CHF 150 across the border without paying tax. Previously, the limit was 300 francs per person.

This halving is particularly pleasing for the local retail trade. This is because the measures will restrict shopping tourism in countries close to the border. "For the Swiss retail trade, the adopted measure is a step in the right direction," said the association of the largest retailers when asked by blue News. The high VAT exemption limit gives retailers in neighboring countries a competitive advantage and makes bulk purchases abroad attractive, according to IG Retail.

Dagmar Jenni from the Swiss Retail Federation also welcomes the decision. "The current system - waiving VAT on the import of purchases made by people who buy for less than CHF 300 in neighbouring countries, while they can also reclaim the foreign VAT paid - not only creates false incentives, but in fact subsidizes foreign retailers," Jenni is convinced. "This unequal tax treatment of domestic and foreign consumption is a major nuisance for the Swiss retail trade, especially in border regions, and also has a major economic impact of over CHF 10 billion - around 10 percent of Swiss retail sales."

No joy for consumer protection

For Jenni, the Federal Council is likely to go even further. "We would have liked to see a further reduction: only a reduction to 50 francs would effectively ensure a level playing field for all market participants, which in turn would reduce shopping tourism in the long term," says the Director of the Swiss Retail Federation. The IG Retail Trade also echoes this sentiment: "Complete equal tax treatment would only be achieved if the value-free limit were to correspond to the amount of the de minimis limit of the respective neighboring country," it says in response to a request.

The reduction is less well received by Consumer Protection. Managing Director Sara Stalder told blue News that it would close off the market for Swiss consumers. "This regulation removes any incentive for local retailers to lower their product prices and margins," says Stalder.

She describes the lowering of the duty-free limit as "pure symptom control". It would also create a disproportionate amount of work for the customs authorities. According to Stalder, it would be much better to apply the lever to Swiss prices. "Retailers should finally do their homework and implement the overdue price reductions," says the Managing Director. According to her, reductions would have been possible long ago due to the legal adjustments. "Instead, retailers are using politics to seal off the market for consumers so that they can continue their high-price strategy."