Cutting VAT Refund Limits to Power Switzerland’s Tourism and Shopping Appeal

Foreign visitors' purchases now play a big role in Switzerland's economy. Not only do watch and jewelry retailers benefit from tax-free shopping, but SMEs that sell goods in the lower to middle price range—such as souvenirs, specialty foods, handicrafts, etc.—are particularly encouraged to draw in foreign clients. In the EU, there is a trend toward lowering barriers to tax-free shopping and lowering minimum purchase amounts.

In light of this, the Federal Council is asked to modify the Federal Department of Finance's current ordinance regarding the tax exemption of domestic deliveries of goods for export during travel. To improve Switzerland's competitiveness as a shopping and tourism destination in relation to other European nations, the minimum purchase amount for VAT refunds under Article 1b should be lowered from CHF 300 to CHF 150.