Tax-Free Shopping Across Swiss Borders

One of the first pieces of information that trickles down to Switzerland newcomers is all those inexpensive shopping possibilities abroad and the miraculous tax refunds that come with them.

Back in 2012, I was new to Switzerland, too, picking up all kinds of rumors about tax-free shopping here and there. Getting a clear picture on this subject wasn’t easy for me, as I stumbled upon various contradictory opinions and even had to defend myself against the accusation of being a saboteur of the Swiss economy. ;-) Now that I’ve learned the ins and outs of tax-free shopping abroad, I’d like to summarize my knowledge in order to help you get on with it problem-free.

Please note that it is possible for Swiss residents to shop tax-free both online and offline. I believe we should take advantage of both approaches. This post is focused on the offline aspect, i. e., shopping in brick and mortar stores across Swiss borders and reclaiming the foreign Value Added Tax.

If you're completely new to the concept of tax-free shopping or cross-border shopping, I suggest you continue reading. Having grasped the principle, you can move on to learn about the beauty of tax-free online shopping (using Amazon as an example).

So before we get started with the “how,” let’s take a look at the “why,” “where,” and “how much.” If you’re not interested in any background information, just jump to the step-by-step guide.

Why Cross-Border Shopping is for You

If you go to a foreign shopping mall close to the Swiss border, you’ll quickly realize that a big chunk—if not the majority—of the clientele hails from Switzerland. Why? Essentially because those folks are keen to take advantage of

  • significantly lower retail prices abroad,
  • the possibility to reclaim the foreign Value Added Tax (VAT), and
  • a large choice of foreign products.

As soon as the Swiss National Bank abandoned its cap of 1.20 Swiss francs per euro in January of 2015, the value of Swiss currency (CHF) reached unimagined heights. In single blow, the buying power of Swiss residents in the euro zone (EUR) soared up by 30%.

Throughout the course of the year, the exchange rate leveled off at around 1.08 EUR/CHF (1 EUR = 1.08 CHF), rendering many products in the euro zone about half as expensive as in Switzerland. This situation has persisted through to today (September 2016). And if it weren't for the central bank's tactical currency interventions, it would be even better than that.

On top of these excellent monetary conditions, Swiss residents can benefit from a whopping foreign VAT refund after they export their items from the European Union (EU). Depending on the country, it’s possible to save up to 18% of the foreign gross price this way. Together, these two factors can make up a considerable saving on your living expenses.

And last but not least, one of the underestimated advantages of shopping abroad is that you get access to a vast assortment of foreign goods, some of which aren’t provided by our dear Helvetia.

Whether or not it makes sense for you to jump on the bandwagon of cross-border shopping depends on several individual factors, including:

  • your travel time to domestic and foreign shopping opportunities
  • means of transportation available to you
  • the specific products you’re after
  • your shopping preferences
  • your time prioritization
  • your thriftiness

Of course, if you live right at the border—say Kreuzlingen or Basel—foreign malls are a stone’s throw from your place; it makes a lot of sense to jaunt across the border, as there’s no extra effort involved.

However, if you reside more upcountry—for instance in Luzern or Thun—the distance is considerable. But even then, there might still be a viable case for bulk purchases. Just ask yourself whether the aforementioned benefits are worth your time and effort.

If so far you’ve never explored any shopping opportunities abroad—be it groceries, clothes, or furniture—I suggest you give it a try at least once to experience it firsthand and get a better picture.

Where and How Much You Can Benefit

Generally speaking, you’re quite likely to pay less for almost anything if you buy it outside Switzerland. Being a Swiss resident, you can also receive a VAT refund from most foreign vendors. The focus of this post is all the foreign shopping opportunities within reasonable driving distance from Swiss borders. Hence, the countries in question are

  • Germany,
  • France,
  • Italy, and
  • Austria.

(Liechtenstein is a special case and won't be considered here.)

Of course, you’ll want to chose the shopping spot closest to your home. Unless you live in the tripoint in Basel, it should be pretty clear what country it’ll be for you.

In case you’re curious, though, there are slight differences in price, quality, and service between the countries. If we take a look at groceries, for example, the dominant opinion on the web is that Germany offers the lowest prices, whereas in France and Italy you can better satisfy your gourmet food needs. But generally, you can expect to save up to half of the Swiss price in all neighboring countries.

It’s also my impression that Germany and Austria are a bit better adapted to Swiss shoppers. You can tell by their smooth VAT refund handling. But in France and Italy, you can achieve the same results—you just might need to be a little more persuasive and stubborn.

Speaking of VAT refunds, let’s look at the numbers:

VAT ratesNormalReduced
% of net price% of gross price% of net price% of gross price
Germany191676.5
France2016.75.55.2
Italy221843.8
Austria2016.7109.1
Switzerland87.42.52.4
Examples
furniture, hardware, DVDsbooks, food

As you can see in this simplified chart, all four countries maintain normal and reduced VAT rates, which are significantly higher than the Swiss ones. While the reduced rates usually apply to books and groceries, you’ll pay the normal rates for most non-food items. The actual rates will be mentioned on your purchase receipt. More details about VAT rates in EU member states can be found here.

Before we proceed to the step-by-step guide, let me clarify one thing that frequently causes confusion in the cross-border community. The VAT rates are defined in the countries’ laws as a percentage of the net price (second and fourth columns). In contrast, your potential VAT savings (based on the gross price you actually pay) can be found in the third and fifth columns, respectively.

Step-by-Step Guide to Tax-Free Shopping Across the Border

No matter which country you’re shopping in, here’s the general procedure:

  1. Take your Swiss ID/permit along with your national ID or passport.
  2. Go abroad and buy stuff at the foreign store of your choice.
  3. During check-out, ask the cashier or the customer service representative for an export certificate ("Ausfuhrschein" in German).
  4. Fill in your name, Swiss address, and ID number as it appears in your Swiss ID document/Swiss permit.
  5. Present the local Customs office with your Swiss ID document and ask them to stamp your export certificate (including the receipt).
  6. Declare your items at the Swiss Customs if necessary.
  7. Bring your stuff home to Switzerland.
  8. Reclaim your VAT using the refund mechanism offered to you by the vendor:
    1. Personally return to the store and get a VAT refund.
    2. Get a VAT refund from a refund service provider.

All in all, it’s a fairly straightforward process and requires only a little extra effort compared to shopping in Switzerland. But before you rush across the border, let me alert you to some common pitfalls and important details of the process.

Necessary Documents Abroad

In order to be able to reclaim VAT later, you need to bring an ID document certifying your permanent Swiss residence. Your nationality/citizenship doesn’t matter. If you’re not a Swiss national, you should take your Swiss residence permit with you.

In any case, don’t forget to take your national passport with you. In fact, Switzerland is part of the Schengen Area just like its surrounding neighbors, which means that there is usually no passport control at the borders. Nevertheless, I’d never cross the border without my passport or national ID card.

Buying Stuff at Foreign Stores

Despite my praise of all these tantalizing foreign prices and tax refunds, you shouldn’t blindly stuff your cart with everything you can find in the aisles like there’s no tomorrow.

First, certain Swiss products—such as meat and cheese—tend to be of better quality, so it might be a better decision to buy them at home in spite of the higher prices. (Strangely enough, however, there are many Swiss-made products—like clothes and watches—that are indeed less expensive abroad.)

Second, for certain products, the price difference is rather minuscule to justify a trip abroad, especially if you have limited transport capacity. In my experience, this is true for yogurt or shampoo, for example.

Third, there are indeed certain cases—e.g., particular brands of nuts or wine—where foreign products turn out even more expensive than back home. A list of items that are suspected to be cheaper in Switzerland can be found on weissepreise.ch.

My point is that most foreign products are truly a bargain (especially when shopping tax-free). But before buying something, you should always compare it to your options at home.

Handling the Export Certificate

If you’re keen to get the foreign VAT back, you should ask the cashier for an export certificate ("Ausfuhrschein" in German). Ideally, you’ll do so right before you pay. After paying the gross price, you’ll receive the certificate together with your receipt, either from the cashier or from the customer service desk.

In some cases—such as in selected Aldi Süd stores along the Swiss-German border—they’ll first ask you to register for a customer card and to provide a bank account for VAT refunds.

Make sure your receipt is attached to the certificate using staples or tape. This is important for your later visit at the foreign Customs office.

The standard export certificate will look similar to this template from the German Customs office. Others might be formatted differently. In any case, enter your full name, Swiss address, and Swiss ID number in the corresponding fields exactly as they appear in your Swiss ID document. The price and the VAT of your purchase should already be pre-filled by the store. If you’re a frequent customer, many vendors offer personalized export certificates for your convenience. Tax-free shopping deluxe!

Dealing with the Customs Offices

Let’s get something straight: if you want to receive a refund for the foreign VAT, you should make a visit to the foreign Customs office. They will officially confirm the export of your goods from the EU. Getting this confirmation is absolutely voluntary on your part.

Should your purchases require an import declaration for the reasons explained below, you must inform the Swiss Customs office independently of your business with the foreign counterpart.

Let me show you how you can pave the way for a foreign VAT refund and at the same time legally avoid the Swiss import tax and duty fees.

First of all, check if your overall purchase price exceeds the minimum amount required for a VAT refund in the country you’re shopping in:

Minimum purchase price for VAT refunds in EUROfficial information by
Germany0German Federal Customs Service
France175French Directorate-General of Customs and Indirect Taxes
Italy155Italian Customs and Monopolies Agency
Austria75Austrian Customs Administration

If it does, you can go to the foreign Customs office and present them with

  • your Swiss ID doc (please don’t forget it), and
  • your tax free form, including the original receipt.

The officers usually compare the entries in the export certificate with the data in your ID and your receipt. If they match, you get a blue stamp stating the current date and the responsible Customs office. (As you can learn from the French Customs' leaflet, it's also possible to use an electronic VAT refund solution in France.)

If your bills or receipts are older than one day, the officers get suspicious and might ask you questions about the goods. Although they never really verify your answers (at least I’ve never witnessed that), bear in mind that it’s considered a criminal offense if you have them stamp receipts of goods that

  • you don’t actually carry with you,
  • you’ve already exported and then reimported before, or
  • you don’t export immediately and permanently after stamping.

Also note that not all foreign goods are exempted from foreign VAT. Usually, tax on services that have been rendered abroad (e.g., public transport, restaurants, hotels) is non-refundable. Another much-debated exception concerns goods for equipping, supplying, or maintaining a private vehicle (check this discussion on englishforum.ch). Explore the links provided in the table above for more information.

Some foreign Customs offices are right at the border and are most accessible by car or bicycle. Some others are located conveniently at the train station of a border town like Waldshut or Konstanz. Plan your trip such that you can make it there within their opening times.

No matter whether you dealt with foreign Customs or not, you are obliged to declare your goods at the Swiss Customs if

Just let the Customs officer know or use the declaration box if you arrived outside business hours. Even if you made it past the checkpoint, a special Swiss patrol can stop you later and still check your items. Also remember that sometimes Swiss Customs officers have direct contact with their foreign colleagues. So if you received your stamps from foreign Customs but want to sneak past Swiss customs, they might be warned.

So don’t push your luck—pay your taxes and duties if you have to. Or better yet, just try to lawfully avoid all import costs and the declaration hassle altogether by staying below the limits mentioned above.

To eliminate the import tax (Swiss VAT), for example, make sure that your items can be distributed such that each person in your group does not “own” more than 300 CHF-worth of goods net. Bear in mind that your stamped export certificate will reveal the true buyer of each item, should the Swiss Customs officers insist on looking at it.

While paying the low Swiss import tax of 8% or 2.5% wouldn’t be a real deal-breaker considering the far greater savings, you really should avoid the hefty duty fees on certain restricted products. For instance, you shouldn’t import more than 1 kg of meat or more than 5 litres of beer per person per day, as you can tell from the duty-free allowance table by the Swiss Customs Administration.

In a nutshell, try to stay above the minimum purchase price for VAT refunds but below the Swiss tax- and duty-free limits. In this way, you can benefit to the fullest extent and spare yourself some administrative effort.

Getting the VAT Refund

Let me first dispel the common misconceptions associated with VAT refunds:

  • As a Swiss resident, you can reclaim only another country’s VAT and not the Swiss one.
  • Neither the Swiss nor the foreign Customs will reimburse the foreign VAT to you. The refund is granted by the foreign vendor.
  • The foreign vendor offers the VAT refund on a voluntary basis. The customers are not entitled to it.

As mentioned before, there are two ways of reclaiming the foreign VAT. It’s the vendors’ decision whether they reimburse their customers

  1. during their next visit, or
  2. via a refund service provider.

Both methods require that the customer submit the stamped export certificate together with the original receipt. Therefore, be sure to keep a copy of the receipt for possible warranty claims in the future.

The first option is predominant in stores close to Swiss borders. You just revisit the store during your next shopping trip and hand over the stamped export certificate together with the original receipt. Either the customer service desk pays you cash, or the cashier deducts your VAT refund during checkout and issues a new export certificate for your next refund. Now isn’t this a proper customer loyalty program?

The other option, which is more characteristic of upcountry stores, is to use a third-party tax refund service. This is especially useful for tourists and other non-recurring customers who’d like to receive the VAT refund close to where they live.

For example, Global Blue is one of the most popular tax refund providers, offering numerous refund offices across Switzerland. You should present them with your Swiss ID document and hand over your stamped export certificate (they call it a tax free form) along with the original receipt. After a quick check, you’ll be payed off immediately.

Another option is to mail them the stamped, completed form and the original receipt using the Global Blue envelope. If you do that, you’ll receive your VAT refund on your credit card a couple weeks later.

Bear in mind that using a third-party refund service implies high charges for the most part. This might mean that by the time it’s all said and done, you only get to keep two-thirds of the actual VAT refunded to you by the vendor. That’s why I prefer the stores that offer a full VAT refund. In most cases, such stores reimburse their customers without involving third-party service providers.

Conclusion

Let’s wrap this up! As a Swiss resident, you can benefit big-time from foreign shopping opportunities beyond Swiss borders. You can enjoy a huge choice of foreign goods, very competitive prices, and enticing VAT refunds. Shopping abroad allows you to add more variety to your life while significantly cutting down your expenses.

How much sense it actually makes for you depends on your individual situation and personal preferences. If you decide to indulge in cross-border shopping, you can follow the step-by-step guide above to avoid common pitfalls and to ensure a smooth process.

Now that you know how it works with physical stores across the border, are you also ready to benefit from foreign online stores? If you enjoy shopping online, you shouldn't miss out on my post series about tax-free shopping on Amazon. Should you decide to import your ordered goods yourself, the whole tax refund procedure is actually not much different from the one described above.

But don't become a restless cross-border fanatic! :-D Never lose sight of the value of the Swiss market (both offline and online), as there are definitely various cases for its superiority as well. Here’s my mantra:

Always compare the offers at home and abroad to make the most out of both worlds.

Sounds good? Leave a comment below and tell me what you think!

Good luck and happy shopping!