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Research by Country/Region January 20, 2018  
SWITZERLAND: CUSTOMS, TAXES and DOCUMENTATION REQUIREMENTS for IT PRODUCTS and SERVICES IMPORTS

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A. Is this country a member of the Information Technology Agreement?

B. Customs documentation requirements for IT products

C. Software: duties and taxes, updates, licenses, electronically delivered

D. IT services: tax treatment and other regulations

E. Refurbished, used, or repaired computer equipment imports

A. IS THIS COUNTRY A MEMBER OF THE INFORMATION TECHNOLOGY AGREEMENT?
NO.

Signatories to the Information Technology Agreement (ITA) have eliminated their import duties on a wide range of information technology products, including software and computer hardware. For more information on the ITA, and exact tariff elimination schedules of signatories, click here
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B. CUSTOMS DOCUMENTATION REQUIREMENTS FOR IT PRODUCTS

What are the documentation requirements for the physical import of software? For other information technology products?
Generally, any import requires proper documentation (such as invoices, delivery slips, or contracts) that identifies the type of software (e.g. systems or applications software; updates; upgrades; replacements; demo or testing software; files; databases; data storage media containing business or personal data; etc.). In addition, the paperwork must detail the type of contract the shipment is based on (a sale; license agreement; maintenance agreement; subscription; complimentary right of use; temporary, non-renewable or renewable right of use; etc.). These documents will be used to assess the applicable tax rate. For sales, the shipper must declare the purchase price payable by the buyer, while license agreements must specify on-time or recurring fees, and their respective amount. If the software is provided free of charge, the enclosed Customs paperwork must state the price that an independent third party would have to pay in a normal sale. If software is shipped within the context of a subscription agreement, the value of that particular incremental shipment applies. Corrective software must be declared as such, and must be valued at the price of the software program to be replaced. All the aforementioned information must be supported by relevant enclosures such as copies of invoices, license or maintenance agreements, etc.

If sent by mail (but not buy courier such as FedEx and the like), shipments must include a green Customs label (for letters) or a waybill (for parcels), respectively, detailing all information required for Customs declaration. Documents such as agreements, invoices, delivery slips, etc., must accompany the shipments themselves (for letters) or must be enclosed with the waybill (for parcels), respectively.

Exact documents required vary depending on the mode of delivery, e.g. via USPS or couriers such as FedEx etc., which will provide exact specifications or blank forms. This applies to other information technology products.
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C. SOFTWARE: DUTIES and TAXES, UPDATES, LICENSES, ELECTRONICALLY DELIVERED

1. DUTIES AND TAXES ON SOFTWARE IMPORTS

Are duties assessed on the intellectual property of the software or on the medium on which it is presented?
Duties and apply if the item is physically imported across the border, e.g. intellectual property stored electronically on a medium, such as a tape, diskette, CD-Rom, etc.

Customs duties:
Customs duties are assessed based on the gross weight of the medium. If the intellectual property stored on it does not add to the medium’s gross weight, it will not affect Customs duties.

The rates of applicable duty are published in the General Tariff downloadable on the Internet (5MB); note that the document is available in German, French, and Italian only:

German: http://www.zoll.admin.ch/d/firmen/import/generaltarif_d.pdf
French: http://www.zoll.admin.ch/f/firmen/import/generaltarif_f.pdf
Italian: http://www.zoll.admin.ch/i/firmen/import/generaltarif_i.pdf

The main Customs duty codes (status 2003) are as follows:
MerchandiseDuty CodesFee (per 100kgs/220 lbs. Gross weight)
Storage media containing data
(E.g., CD-ROMs, floppy disks,
data tapes containing standard
software, customized software,
software updates and/or upgrades, etc.)
From 8524.3100 to 8524.9990CHF38.00 maximum
Software license printed on
Paper, containing the license
Agreement plus (a) licensee
Specific data or (b) blanks for later completion with licensee specific data
4901.1000 or 4901.9900Duty free
Computer and telecommunications hardware and partsVarious (From 8471.300 to 8471.8000, 8473.3000,etc.)IT hardware (excluding consumer electronics equipment) can usually be imported duty free (Information Technology Agreement, ITA)

For binding information on applicable Customs tariffs, please contact the Swiss Federal Customs Authority (Oberzolldirektion) either using form 40.10 “Tarifanfrage), downloadable at http://www.afd.admin.ch/d/firmen/import/form_40_10.pdf), or by providing the same information in a different format.
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Are taxes assessed on the intellectual property of the software on the medium on which it is presented?
Taxes apply if the item is physically imported across the border, e.g. intellectual property stored electronically on a medium, such as a tape, diskette, CD-ROM, etc.,

Value Added Tax (VAT):
VAT is based on the price of the imported item, including services and licenses, which the buyer is to pay the supplier. Hence, when intellectual property is imported physically on storage media, VAT is based on the import’s total sales value (i.e., the sales value of the storage medium plus that of the intellectual property stored on it.

If the supplier only sells the right to use the intellectual property (e.g. licensed software), then VAT applies to both the sales value of the storage medium imported and the license fee. If the buyer purchases a license that entitles him/her to additional services, then the sales value of those services are also subject to VAT.

If the supplier is due neither a purchase price nor a license fee – e.g., because the software shipment is free of charge --, the VAT is assessed based on fair market value at the time of import. Fair market value is defined, as the purchase price the buyer would have to pay for the same item in the item’s country of origin, to an independent supplier and under fair market conditions.

The total sales value must also include the ancillary costs (shipping, insurance, Customs clearance, etc.) incurred up to the item’s first destination in Switzerland, unless already included in the sales price.

Currently (2003), a VAT rate of 7.6% applies to the total sales value (or fair market value, respectively) of data storage media, whether imported or produced domestically.

In some cases, no fair market value is applied to data storage media.
-Software imports based on a contract that does not specify the number of data storage media to be shipped over the course of the contract’s duration (e.g., a maintenance contract);
-Software requiring recurring license fee payments
-Software not freely available on the market (e.g., a software program under development);
-Software segments or parts of indeterminable value (i.e., not evident from price lists, individual orders or an invoice);
-Architects’ and engineers’ blueprints; attorneys’ legal documents; experts’ reports; translations of texts; to the extent that the aforementioned items are provided as part of a separate business transaction.

In Switzerland, value-added taxation is governed by two separate authorities: at the border, Swiss Customs (Zollverwaltung) levies VAT on imports; domestically, VAT is collected by the Swiss revenue service (Steurerverwaltung). If an import of a data storage medium containing intellectual property is of no determinable market value, then VAT is payable not to Customs, but to the Swiss revenue service after importation. In this case, VAT applies to the purchase price of the data storage medium including the intellectual property stored on it, as well as any additional rights and services related to the sale. It is the responsibility of the buyer of such data storage media to report the purchase of a service from a foreign-based supplier, and to pay the applicable taxes.

Full tax exemption applies to data storage media containing business or personal data which are customarily exchanged free of charge between businesses or individuals (statistics, sales figures, correspondence, etc.), as well as to printed lists offered at no cost (e.g., samples of a file/database).

If imported physically on a data storage medium, software must be declared to Customs at any rate, even if it is of no fair market value or if its import is tax exempt.

Different regulations apply to non-physical imports of intellectual property, i.e., software imported electronically via a leased line or over a network such as the Internet (see Question IA F).
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Is customized software treated differently than packaged software?
No.

2. IMPORTS OF SOFTWARE UPDATES

What are the customs duties and tax implications for software sold with updates when the full sales price, including cost of updates, is shown on the original commercial invoice?
If software is imported on a physical data storage medium, and if the invoiced sales value or license fee includes the price of subsequent software updates, the following levies apply:

Import duty:
The cost of updates has no bearing on import duties as they are based only on the gross weight of the shipment.

VAT:
If the software’s purchase price includes subsequent shipments of updates, upgrades or releases, and if the invoice does not itemize the cost of those shipments separately, they will be taxed upon import. However, if the foreign-based supplier does itemize the cost of these subsequent shipments separately on the invoice/license agreement, their cost of these subsequent shipments separately on the invoice/license agreement, their cost will not be included in the assessment – provided that the invoice of foreign-based supplier clearly states that the software updates, upgrades or releases will be shipped at a later date.
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What happens when the updates are sent at a later date? Are duties/taxes applied again?
Import duty:
Import duties apply in any case, as these updates were not included in the assessment of the original software shipment.

VAT:
In principle, the software update’s purchase value or license fee is taxable at the time it is imported. If the update has already been taxed along with the main software shipment, the importer has the right to reclaim the excess import tax up to five years after the fact, upon presentation of adequate proof and unless the importer can deduct this excess import tax as pre-tax in his/her tax return. To avoid double taxation from the start, the Swiss authorities recommend invoicing software updates only at the time of their physical shipment.
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If so, based on what value?
Import duty:
Import duties are based on the gross weight of a shipment.

VAT:
VAT is based on the invoiced sales value (or fair market value, respectively) of the software update plus any additional costs (shipping, etc) incurred until the shipment reaches its first destination (e.g., a distributor’s domicile) in country.
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How should information presented on the commercial invoice for the original and subsequent shipments to avoid paying duties/taxes more than once on a single sale?
The commercial invoice must include a detailed description of the type of software shipped, the more specific the better. The documents enclosed with a shipment must clearly state whether it is the main shipment of a systems or applications software, a software update or upgrade, a replacement, a correction or testing program, a file, a database, a segment of a software program, etc.

Import duty:
Import duties are levied based on the shipment’s gross weight, so there is no risk of having to pay duties twice.

VAT:
If the software update/upgrade is shipped separately at a later date, but is included in amount invoiced for the main shipment, then the purchase price/license fee for the update/upgrade must be itemized separately on the commercial invoice/delivery slip enclosed with the main shipment.
In addition, the invoice/delivery slip must clearly show that the update/upgrade is not enclosed with the main shipment. Consequently, the invoice/delivery slip accompanying the subsequent shipment of the update/upgrade must list only the purchase price/license fee for the update/upgrade.

It is not sufficient to simply state, on the invoice/delivery slip, that the update/upgrade was taxed along with the main shipment. At the time of import, any such claim must be supported by the Customs receipt for the original shipment, which only the buyer can produce. To this end, it is up to the buyer to submit the relevant Customs documents and invoices to the Customs authorities. Such proof does not exist at the time of import, therefore, Swiss Customs recommends invoicing updates/upgrades only when the merchandise is being physically imported. Alternatively, the supplier may choose to provide an itemized invoice listing the relevant purchase prices/ license fees separately, and explicitly declaring that the updates/upgrades are not enclosed with the shipment.

If sent to Switzerland by mail, the foreign software shipment must be accompanied by a green Customs label (for letters) or a waybill (for parcels) declaring the above information. For proof, such information must be supported by photocopies of contracts, invoices, delivery slips, etc., to be enclosed with the shipment itself (in the case of a letter) or with the waybill (parcels).
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3. SOFTWARE LICENSES: CUSTOMS CLASSIFICATION, IMPORT DUTIES, TAXES, OTHER

Are Software licenses classified in harmonized System 4907?
No. Software licenses that are printed on paper and either include specific customer data or have been prepared for subsequent completion with such data, are classified under 4901.10 or 4901.99.
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Are import duties/taxes applied?
Customs duty:
No import duties apply to software licenses.

VAT:
The import per se of software license, whether on paper or other media, confers a legal right and as such is not taxable. However, a software license is considered a service, and if it is purchased from a foreign-based supplier, the Swiss buyer is required by law to report the purchase of the license to the Swiss revenue service, and pay applicable taxes.
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If so, on what cost/price base are they levied?
These services are taxed within Switzerland and are therefore under the authority of the Swiss revenue service.
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Are withholding or other additional taxes applied on software licenses? If yes, how?
No.
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If a U.S. license agreement is included in the packaging or is part of the installation/registration of shrink-wrapped software imported from the United States, would that agreement be binding on consumers in your market?

If so, would U.S. local laws pertain?

4. SOFTWARE DELIVERED OVER THE INTERNET/ELECTRONICALLY DELIVERED SOFTWARE

Are taxes applied to software delivered to the end-user over the Internet? If so, on what value?
Customs duties:
None; the delivery over the internet does not involve physical import. (By contrast, software imported in a tangible form (e.g. on a diskette, CD, etc.) is subject to Swiss Customs duties, and the foreign company is subject to VAT on annual sales of CHF75,000 or above (Art.21 MwStg)).

VAT:
The sale (import) of software licenses via the internet is governed by the VAT department of the Swiss revenue service. It is considered a service (Swiss VAT law, art. 7MwStG) and as such it is taxed at the domicile of the user’s business or commercial activity (Art. 14 par. 3 MwStG). Therefore, it is the Swiss recipient/user who will pay VAT on services rendered, not the supplier.

VAT is based on the stated value of the sale (see above)
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Would the situation be different if this software were instead delivered to a distributor who has a license to produce (replicate) and sell the software?
If a Swiss-based distributor receives a physical master copy of a software, along with the copyright and distribution rights for the Swiss market, applicable VAT will be based on the fair market value of the master copy, i.e., its production cost plus retail margin. The Swiss-based distributor must report to the Swiss revenue service the license fees paid to the foreign-based supplier for all software duplicated and sold within Switzerland, as such licenses constitute a service purchased from a foreign-based supplier and as such are VATable.
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What are the documentation requirements for the electronically delivered import of digitized products (I.e. software, movie downloads) over the Internet or other networks?
As they do not involve a physical import, electronic deliveries are governed by the VAT department of the Swiss revenue service. Commercial, digitally delivered imports require setting up a registered local subsidiary or licensing/contracting a local representative, which may include distributors, agents and even mere individuals. For the aforementioned VAT payments on sales of CHF75,000 or more, the U.S. supplier (via their registered local subsidiary or legal representative) must report annual sales to these authorities. Note that in the case of an individual representing the supplier, the U.S. supplier ultimately remains legally responsible for the proper, timely and complete filing of all paperwork.
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Must an electronically delivered software import be accompanied by a physical shipment of the same product?
If sent by mail
No.
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D. IT SERIVCES: TAX TREATMENT AND OTHER REGULATIONS

Are services (i.e. training, set-up, etc) relating to the sale of software taxed? If so, at what rate and based on what value?
Additional services provided in connection with the physical import of computer software are indeed taxable (VAT), based on the fee payable for these additional services, or on their fair market value – Unless the foreign –based supplier has registered with the VAT section of the Swiss revenue service, and therefore reports sales and pays Swiss VAT annually.

For this reason, any additional services must be explicitly listed on the invoice/delivery slip enclosed with the shipment. Further, the supplier should note that annual Swiss sales of or exceeding CHF75,000 (approx. US$57,700) are VATable, and require registering with the Swiss revenue service (http://www.estv.admin.ch/data/mwst/index.htm), either on the part of the supplier proper or their local contractor. To register, the foreign-based supplier requires a local fiscal representative (e.g. by opening their own Swiss subsidiary or contracting a Swiss-based third party).
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Are U.S. IT solution providers permitted to send personnel into the country to set up hardware/software-related systems?
Yes

Are special visa, work permits, and/or professional certification by an accredited body required?
Please refer to the German Embassy’s web site on Visa Information.
http://www.germany-info.org/relaunch/info/consular_services/visa.html
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E. REFURBISHED, USED, OR REPAIRED COMPUTER EQUIPMENT IMPORTS

1. REFURBISHED COMPUTER EQUIPMENT

Is the import of refurbished computer hardware, parts, and accessories (including toner cartridges) permitted?
Yes.
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If so, what are the documentation requirements?
The documentation requirements are identical to those for new merchandise.
See answers to question 2A.
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What value should be shown on the invoice?
The invoice should show the purchase price payable by the Swiss-based buyer, including any additional costs incurred until the shipment reaches its first destination within Switzerland. Unless included in the original purchase price, any charges for modifications or customization are also taxable. In the case of complimentary shipments, their fair market value applies. For definitions please see the answer to question IA.
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How are duties and taxes assessed?
Based on the shipment’s gross weight. For applicable rates please see the General Code (Zolltarif, web address included in answer to question IA)

VAT:
Based on the purchase price payable by the buyer or fair market value, respectively, plus additional costs incurred until the shipment reaches its first destination within Switzerland (unless included).
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2. USED COMPUTER EQUIPMENT

Is the import of used computer hardware, parts, and accessories (including toner cartridges) permitted?
Yes.
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If so, what are the documentation requirements?
No distinction is made between new and used parts. See answer to question 2A.
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What value should be shown on the invoice?
See answer to question 2A.
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3. REPAIRED COMPUTER EQUIPMENT

Are duties and taxes assessed on the re-import of repaired computer equipment?
According to the Swiss General Code (Zolltarif), ICT hardware imports are duty free. For dutiable imports that are later temporarily re-exported for repair or maintenance, Swiss-based owners can get an exemption (Freipassabfertigung) through their courier, or through the regular national postal service (Postvormerkabfertigung), the ensure the duty-free re-import of the repaired item. The exemption is obtained by enclosing a special Customs Form (,,Freipassabfertigung” or “Vormerkabfertigung”, respectively) with the exportable shipment. For more information, please see the corresponding page of the Swiss Customs agency website http://www.afd.admin.ch/d/firmen/export/revers/p_veredlung.php (German/French/Italian only).

VAT:
The re-import of IT hardware repaired abroad is tax exempt, with the exception of the fee paid for repair work carried out on the hardware. However, tax exemption only applies if the re-import is accompanied by all the necessary documents, proving that the hardware was exported temporarily for repair only and that the special Customs forms (Freipass/Vermerkschein) were enclosed. Alternatively, the documents must show that the hardware originated in the domestic (Swiss) market that was exported temporarily for repair under contract, and is being returned to its sender in Switzerland. Unless these requirements are met, VAT will apply based on the fair market value (see IA for definition) of the re-import.

If on re-import VAT is erroneously charged based on fair market value, the charge may be challenged within five years and, upon presentation of relevant proof to the Customs agency, will be reimbursed. However, this procedure applies only if the Swiss importer cannot claim the amount as a pretax reduction in their tax return (Vorsteuerabzug).
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How should the commercial invoice appear?
In particular, the paperwork should clearly reflect that the hardware is a re-import upon repair abroad. In addition, the paperwork must provide answers to the following questions:
· What is the cost of the repair?
· Were any new parts/components used in the repair?
· What is the cost of new parts/components used?
· Was the repair paid for in kind, with used or non-operational equipment?
· If so, what was the value of that equipment?
The Customs invoice must also reflect any repair work carried out under a warranty, if applicable.
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RESPONSE INFORMATION
This response was prepared by the U.S. Department of Commerce/Commercial Service in Zurich, Switzerland, in February and June 2003. For further clarification please contact:

Philippe Mettler
Commercial Assistant,
U.S. Embassy Zurich
Tel. (41-1) 380 – 1256
Fax (41-1) 382-2655
Philippe.Mettler@mail.doc.gov

Internet / E-Commerce law:

Homburger Attorneys-at-Law
Mr. David Rosenthal
Counsel IT and Telecommunications
Weinbergstrasse 56/58
P.O. Box 338
CH-8035 Zurich, Switzerland
Tel. (011-41-1) 265-3535
Fax (011-41-1) 265-3511
Email: david.Rosenthal@homburger.ch

VAT:

Eidgenoessische Steuerverwaltung (Swiss Federal Tax Administration)
Hauptabteilung Mehrwetsteuer (VAT main section)
Abteilung Inspektorat (Inspectorate)
Mr. Frank Ziltener
Eigerstrasse 65
Ch-3003 Bern, Switzerland
Phone: frank.ziltener@estv.admin.ch
URL: http://www.estv.admin.ch

Income Taxes:

Kantonales Steueramt des Kantons Suerich (Canton of Zurich Tax authorities)
Mr. Werner Staedelin
Chef Einschaetzabteilung Nr. 14
Neumuhle
CH-8090 Zurich, Switzerland
Phone: (011-41-43) 259-3750
E-mail: werner.staedelin@ksta.ch
URL: http://www.ksta.ktzh.ch

Swiss Customs:

Eidg. Oberzolldirektion
Sektion MWST
Mr. Bernhard Messmer
Monbijoustrasse 40
CH-3003 Bern, Switzerland
Phone: (011-41-31) 322-6690
Fax: (0011-41-31) 322-4381
Email: Bernhard.messmer@ezv.admin.ch
URL: http://www.zoll.admin.ch

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