This topic explains particularities of tax setting for Swiss-based online shops using only IOSS special VAT scheme and selling to EU and other countries (USA, Asia, etc.)
We generally propose that Swiss IOSS customers exclusive pricing model for their WooCommerce shops.
This model means that prices in the catalog are kept net of VAT (without VAT) and VAT is added when needed. Sales to Switzerland will have 7.7 percent on top of the base price while sales to EU and other supported countries will be with consumption country VAT included.
The reason for suggesting the exclusive pricing model is a sizable difference in VAT rates between the EU and Switzerland – in most EU countries VAT is around 20 percent, while Switzerland is only 7.7. percent.
The example below depicts the results of sales made to the EU and to Switzerland with an inclusive pricing model
| Inclusive pricing model | ||||
| Sales fulfilled from Switzerland to the EU | ||||
| Consumption country | VAT rate (%) | Base price | VAT | Paid by customer |
| Germany | 19 | 42.02 | 7.98 | 50 |
| Finland | 24 | 40.32 | 9.68 | 50 |
| France | 20 | 41.67 | 8.33 | 50 |
| Domestic sales in Switzerland | ||||
| Switzerland | 7.7 | 46.43 | 3.57 | 50 |
As evident by example, the baseline price difference would be considered between Swiss sales and sales made to EU countries.
The example below depict an exclusive pricing model
| Exclusive pricing model | ||||
| Sales fulfilled from Switzerland to the EU | ||||
| Consumption country | VAT rate (%) | Base price | VAT | Paid by customer |
| Germany | 19 | 42.00 | 7.98 | 49.98 |
| Finland | 24 | 42.00 | 10.08 | 52.08 |
| France | 20 | 42.00 | 8.40 | 50.4 |
| Domestic sales in Switzerland | ||||
| Switzerland | 7.7 | 42.00 | 7.60 | 49.60 |
Decision on the model alternatives lies basically on the business model employed by the online shop– if the shop's main market is going to be the EU one can easily use the inclusive pricing (we will help you set it up properly) with Swiss customers paying a bit extra. If the main market is Switzerland and one wants to have the base price the same for Swiss and EU customers then the better solution is the VAT-exclusive pricing.
Kindly note, that for both pricing models, sales to countries where the shop does not support the calculation of VAT/GST will be done without VAT. The base price for the inclusive model will be calculated as inclusive price minus Swiss VAT (46.43 in the first example) and it would be 42 for the exclusive pricing model. The same rule is applicable to EU sales in the case of B2B sales and B2C sales over 150 EUR.
Please consider your needs and targeted markets before making a decision on the pricing model.
To set up a Swiss-based store for an exclusive pricing model choose the following settings:
General settings:
Tax options :
In the example, the UK is added as the country where tax should be calculated.
EAS plugin settings for deliveries to countries where tax calculation is not supported will have to be left unchecked
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