(11.10.2023) The retail sector is grappling with intense cross-border competition. According to recent analyses by the Swiss Retail Federation on debit and credit transactions, foreign purchases increased by 10.2% in the first half of 2023 compared to the previous year.
Every year, more than 8.5 billion francs are spent in neighboring countries due to shopping tourism, as reported by this association. This shift towards foreign businesses is particularly robust in border cantons such as Basel-City, Basel-Country, Geneva, Jura, Neuchâtel, St. Gallen, and Ticino.
Retail representatives are concerned about the situation, attributing the growth in shopping tourism to favorable tax incentives. Consumers who import foreign goods within the CHF 300 value exemption limit can get a refund of foreign VAT without paying VAT in Switzerland. The association suggests reducing the value exemption to CHF 50, aligning Swiss taxation levels with those in Germany.
According to a study by the University of St. Gallen, lowering the value exemption to CHF 50 would lead to a roughly 33% reduction in foreign purchases. The Swiss Retail Federation calls for support to the competitiveness of retail businesses, which it deems crucial to their survival, especially in the aforementioned border regions. It proposes reshaping regulations to no longer disadvantage local players against foreign competition.
The association comprises 1,600 retailers with a total turnover of 23 billion francs and approximately 58,000 employees.
Last modification 11.10.2023
