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COST OF LIVING

Switzerland: How to get money back when cross-border shopping in Germany

Crossing into Germany to go shopping is usually cheaper - and that’s before you add the tax savings. Here’s how you can claim back tax when shopping in Germany.

Shopping trolleys lined up at a German supermarket. Photo by Markus Spiske on Unsplash
Shopping trolleys lined up at a German supermarket. Photo by Markus Spiske on Unsplash

There are a range of reasons why most things are cheaper in Germany than in Switzerland. 

While there are some exceptions to this – the most notable one being petrol – generally speaking you pay a premium on goods purchased in Switzerland. 

EXPLAINED: Why is Switzerland so expensive?

If you shop in Germany, you can also save on VAT, which is generally 19 percent and added to most goods. 

Here’s what you need to know. 

What are the tax rules for shopping in Germany? 

Residents of Switzerland, as a non-EU country, do not need to pay VAT in Germany on purchases over 50 euros. 

Your country of residence rather than nationality is important here. 

Therefore, a German living in Switzerland and shopping in Germany does not need to pay the tax. 

A Swiss living in Germany however would need to pay the amount. 

Importantly, you need to physically be in Germany when you make the purchase. 

In order to qualify for the tax exemption, you must bring the goods back to Switzerland with you. 

The specific rules for this are laid out by German Customs here, but they need to be either in your carry on or checked baggage, or in a car that you are travelling in personally. 

These rules are to ensure people are buying the goods for themselves rather than intending to sell them on. 

What kind of goods? 

Goods bought in Germany and taken back to Switzerland are exempt from VAT. 

You will generally however be required to pay tax on services rendered or completed in Germany. 

For instance, bus or train tickets in Germany, restaurant bills, hotel stays, massages etc. 

There are also a range of rules which apply to vehicles. 

If you are getting your car repaired, filling up with petrol, affixing bumpers, mirrors or other additions or even getting a car wash, you will need to pay VAT. 

How do I get the money back? 

Unfortunately, you do not get a discount at the place of purchase.

Instead, you need to claim the money back after you have purchased the product on which you paid the tax. 

In most large stores or shopping centres, you will be able to do this on site. 

You need to have a copy of the receipt and fill in the VAT refund form (Ausfuhrschein) with your name, address and Swiss residency permit number. 

You can get one of these forms at larger stores or you can download it and print it here. 

You will need to do one for each invoice. 

Once you have done that, you can take the completed form to the German customs office (Zoll), which you can find at most border crossings and get the paper stamped. 

Then, you need to return the paper to the place of purchase, where they will issue with a refund of the VAT. 

Some stores require you to return after three months, some six and some 12, so be sure to check the store policy. 

Note that some online stores will automatically deduct the VAT if you have a Swiss delivery address. 

Cost of living in Switzerland: How to save money if you live in Zurich

One thing to keep in mind however is that Switzerland charges its own VAT, which is either 2.5 percent or 8 percent. More on that below. 

What’s with all this paper? 

For anyone who’s spent even a few hours in Germany, the country’s reluctance to embrace digital methods of payment and record keeping is clear. 

While cash remains king in many stores and restaurants, claiming back money from shopping in Germany is also a paper-heavy endeavour. 

Fortunately for people not so keen on paperwork, a change is afoot – although exactly when it will take place remains unclear. 

In February 2022, the German government announced it had kicked off a project to make a digital export certificate possible. 

In addition to saving time and paper, the government indicated it expected to save around 6.2 million euros in personnel expenses as around 100 customs officers are currently assigned to the Swiss border alone. 

No deadline has been given for when the change will come into effect. 

Cost of living: How to save on groceries in Switzerland

Swiss customs rules

When bringing goods into Switzerland, you will need to pay VAT if the amount exceeds 300 francs. 

While border patrols are rare, those who make a habit of exceeding this amount – even if it is for goods for personal use – run the risk of falling foul of the authorities. 

There are several different rules in place for bringing in different items, including meats, cheeses and alcohol. 

The limits for each of these items can be found here. 

Keep in mind that while the CHF300 applies now, Switzerland is set to reduce this to CHF50 in the future – although final approval of this has not yet been secured. 

Tax change: Switzerland to introduce 50 franc limit on cross-border shopping

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COST OF LIVING

Seven products that are becoming more expensive in Switzerland

Covid and the war in Ukraine, coupled with rising inflation, made Switzerland even more expensive than it already was before. These are some of the goods you can expect to pay more for.

Seven products that are becoming more expensive in Switzerland

The good news — if we can call it that — is that inflation rate in Switzerland, which stood at 2.6 percent in April, is significantly lower than in neighbouring France (5.4 percent) and Germany (7.8 percent), as well as throughout much of Europe.

However, Swiss consumers are already feeling the increase in prices of many common purchases.

News platform Watson has listed seven goods and services that now cost more, basing its analysis on the national index of consumer prices (LIK), which measures the inflation of consumer goods in Switzerland.

Among the products that are now more expensive are:

Raw materials

Energy prices, including petrol, oil and gas, have increased in recent weeks. “We are currently paying around 77 percent more for heating oil compared to January 2019”, according to Watson.

A litre of petrol currently costs 2.05 francs, versus 1.60 francs in August 2021.

“A recovery is currently not in sight”, Watson added.

READ MORE: How Covid, Ukraine and energy costs are changing Swiss spending habits

Wood

Wood prices started to go up already during the Covid pandemic in 2020, rising by staggering  500 percent from May 2020 to May 2021.

One of the reasons is that wood pellets can also be used for heating.

“The war has not only made the raw material more expensive, but also the production of the pellets”, according to Andreas Keel, Managing Director of Holzenergie Schweiz, who added that in October a tonne of pellets cost 280 francs, and in January it rose to 360 francs.

What certainly doesn’t help matters is that Russia is one of the world’s largest wood exporters and the sanctions currently in place against this country are exacerbating this shortage.

READ MORE: Switzerland extends sanctions on Russian assets

Furniture

If you are looking for a new sofa, table or another piece of furniture, now is not a good time to purchase them, as their cost has risen by around 15 percent. One reason, as stated above, is the higher price of wood, but there are other contributing factors as well.

“The Swedish furnishing giant Ikea increased its prices by an average of 9 percent at the end of 2021. With a market share of 11 percent, Ikea is one of the big players in Switzerland”, Watson said.

Food

While food amounts to only 6.3 percent of an average household budget, it is probably the most important, as nobody can live without it.

The main reason for the increase is that Ukraine exports foodstuffs such as grain, which affects not only prices of products like baked goods and pasta, but also the cost of animal feed — the latter being essential for the production meat and dairy.

Clothing

Clothing prices typically increase in April / May, but this year they rose more than usual.

The war and Covid-related delivery issues are main factors, but the worst is yet to come, according to Andreas Bartmann, vice-president of  the industry association of textile retailers.

“In the fall, [price hikes] will hit us massively,” he said.

READ MORE: How to protect your savings against inflation in Switzerland

Transportation

“Anyone who wants to buy a new car currently has to pay around 10 percent more than in January 2019”, Watson said.

And this increase is likely to continue, mainly due to higher costs of  raw materials and general delivery problems.

Opting for the used-car market is not a solution either, Watson noted, as “the prices there rose even more significantly than for new cars due to the excess demand”.

You could opt for a new motorcycle or bike, but there too prices are expected to climb — also due to shortage of raw materials and delivery bottlenecks.

Travel

Now that Covid restrictions have been lifted in most countries, foreign travel may remain inaccessible for many people anyway,  because it became more expensive.

One major reason is that, with fuel now costing more, airlines are increasing the price of tickets.

By the same token, the price of petrol could make driving to your holiday destination costlier as well.

Your best bet may be to just stay home. It will feel like 2020 all over again, but without the masks.

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