Industrial duties abolished in Switzerland in 2024 - update

What does this mean for businesses?

The abolition of industrial tariffs will have a positive impact on import costs in Switzerland, especially for consumer goods (e.g. cars, bicycles, personal care products, clothes etc.) and raw materials as well as components and semi-finished products imported for the manufacturing businesses. This will strengthen the competitiveness of the Swiss economy at home and in exports.

On the other hand, the main obligations of customs clearance, filing of declarations and the payment of VAT, other taxes and excise duties (e.g. automotive tax, alcohol tax, mineral oil tax etc.) will still remain. Furthermore, it might become more difficult for manufacturing and exporting companies to get the appropriate preferential origin documentation from their suppliers as those documents will not be needed for the import process anymore (but might be important for the later re-exportation).

Therefore, the challenges of cross-border supply chains and interactions with multiple external parties, such as suppliers, clients, freight forwarders and customs brokers remain highly complex and appropriate customs and trade processes are required. The same applies to maintaining correct master data (e.g. tariff codes, countries of origin etc.) in ERP systems and to allocate clear responsibilities to the different tasks in order to fulfill all the reporting requirements.

What is it about?

As part of an "Import Facilitation" package and combatting Switzerland as a high-price island, the Federal Council adopted different measures to reduce trade barriers and costs for Swiss businesses and consumers. The abolition of industrial tariffs is part of this package of measures. In November 2019, the Federal Council adopted the dispatch on the abolition of industrial tariffs for the attention of the Swiss parliament. The dispatch envisaged setting the tariffs for all industrial products in the general tariff to zero and at the same time simplifying the tariff structure.

Although tariffs on industrial products are already generally quite low in Switzerland (averaging 1.8 per cent of the product value) the annual relief from customs duties of around CHF 560 million could be achieved. In addition to the savings resulting from the elimination of duties, the administrative burden associated with imports can be partially reduced for importers. This is due to less detailed tariff classification, the partial elimination of proofs of origin (i.e. for imports) and special customs procedures (e.g. IPR) that will no longer be required to reduce the duty exposure.

In the final parliamentary votes on 1 October 2021, both chambers reconfirmed their approval of the dismantling of industrial tariffs in Switzerland. The decision was then subject to an optional referendum with expiration of the period at the end of January 2022. At its meeting on 2 February 2022 the Federal Council decided that the abolition of industrial tariffs will enter into force on 1 January 2024.

With 1 January 2024, the Federal Council has chosen the date for the measures to come into force in such a way that the conversion effort for economic actors and the administration can be kept as low as possible. All actors - both on the economic and on the administrative side - thus have sufficient lead time for the necessary technical and organisational adjustments.

This means that with an amendment to the Swiss Customs Tariff Act, import duties for all industrial products in the Swiss Customs Tariff will be abolished and that all the industrial goods from tariff chapters 25 to 97 (with a few exceptions) can be imported without customs duties in Switzerland as from 2024.

In parallel, the complex customs tariff structure for industrial products in chapters 25 to 97 will also be simplified. Although Switzerland will keep its 8-digit tariff codes, the 6-digit HS codes (international Harmonized System) will be the basis, completed in most cases with two zeros. This will reduce significantly the number of different tariff codes for these product ranges (by more than 2,000 entries).

The measures do not affect agricultural goods of tariff chapters 1 to 24. For those products the current status will remain the same and customs duties as well as possible import restrictions and quotas are still applied from 2024 onwards.

How can PwC help

PwC supports businesses in all areas to strengthen the processes and interactions. Furthermore, PwC has developed a tool “Trade Activator” that can visualize the cross-border business of your company based upon customs (or broker) data in multiple jurisdictions, including Switzerland. We help you visualize and subsequently analyze your cross-border trade in order to detect future savings possibilities and to mitigate risks.