Swiss "outsmarting" lower VAT-free limit on cross-border shopping, report finds

Just five months into the lower VAT-free limit on cross-border shopping, new reports have suggested that both Swiss consumers and German supermarkets have found innovative ways to circumvent the new rules. Some have even been accused of “outsmarting” the government by telling customers how to make the most of the new limit.

New VAT-free limit has little effect on cross-border shopping

In border towns like Konstanz, Jetstetten and others, it’s business as usual for local stores as they cater to shoppers from across the border. With prices at German retailers often dramatically cheaper than in Swiss supermarkets, many people resident in the alpine nation do their shopping at our northern neighbour.

Though the low prices in Germany may be good for consumers, the Swiss Retail Federation estimates it costs local businesses billions of francs a year in lost revenue. Therefore, the government chose to halve the duty-free limit on cross-border shopping at the beginning of 2025. This means that shoppers can only spend 150 francs on goods from Germany per person per day, before they have to declare the items at the border and pay Swiss VAT.

How are Swiss shoppers getting around the lower limit?

However, new reporting from Blick has revealed that the lower limit is having little to no effect on the number of cross-border shoppers. They reported that many people are simply carpooling across the border to increase the VAT limit. "There are simply more people in the vehicles," a customs officer told the website.

As even babies are technically entitled to 150 francs of German goods duty-free, there has also been an uptick in the number of families coming across the border together. "The price hunters simply drive across the border one more time or take a large car and fill it with twice as many people”, added the president of the Centre Party in Canton Thurgau, Sandra Stadler.

This new phenomenon is best shown by the new cheeky advertisements put on by German retailers. Brands Edeka and Marktkauf recently released a poster depicting a convertible with a Swiss flag and a family of four, with the words “CHF 600 tax allowance” on the number plate.

Swiss cantons call for an end to VAT-free shopping in Germany

Stadler said that she doesn’t blame German shops for trying to appeal to Swiss customers, adding that it was “truly foreseeable” that people would find ways to get around the limit. As it stands, both Thurgau and St. Gallen have called for scrapping the VAT-free allowance entirely, and have in the past submitted the idea as a cantonal referendum.

However, the government is unlikely to reduce the VAT-free limit further soon. In arguing for a 150-franc limit last year, the Federal Council wrote that lowering the limit further or scrapping it entirely would be a bureaucratic nightmare for the police and customs authorities, and would likely end up costing more than any VAT income it brings in.