On July 1, the Federal Council is changing a number of rules concerning the assessment of travellers’ goods. The changes that are relevant for me can be summarised by the statement in the title, which I’ll solve at the end of the article. But first an overview of the changes:
The changes are intended to make the assessment of goods simpler and more transparent and so speed up border crossing. They are also intended to be a condition so that in future the travellers will be able to declare their goods to the customs electronically.
In future, only two questions will have to be answered:
Question 1: Does the total value of the goods carried exceed 300 francs? If so, the import is subject to VAT.
Question 2: Are defined exemption limits exceeded? If so, the import is dutiable.
The following illustration provides an overview of the new rules:
The statement in the title concerns the change for cigars. Today 50 cigars (regardless of the value of the individual cigars) can be imported into Switzerland duty and VAT free. From July 1, 2014 the duty free limit will be raised to 250 cigars. On the other hand the value of the cigars will be taken into account in determining the VAT free limit of CHF 300. As a result in future the import of quality Cuban or Dominican cigars will be subject to VAT of 8%.
For two reasons the customs duties are not very significant. Firstly a private individual is hardly likely to import more than 250 cigars – at my rate of consumption I would need 10 years to smoke all the cigars – and secondly the future customs duty of CHF 0.25 per cigar is very low. Up to now the duty of CHF 18 per kilo was even lower.
However, the VAT charge can scarcely be avoided, because with only the normal box of 25 cigars the limit of CHF 300 is already exceeded, if the cigars cost more than CHF 12 each.
The manufacturers will probably have to adjust their offers in the duty free shops. Otherwise their boxes of cigars costing more than CHF 300 will remain on the shelves.