VAT'S IMPORTANT - NEWSLETTER 2022 - 09



 

NEWSLETTER 2022 - 09


TOTAL REVISION OF THE SWISS CUSTOMS ACT


 

In recent years, the cross-border movement of people and goods has increased significantly - in particular due to the growing and flourishing online trade. As more and more illegal goods are entering Switzerland as a result, on the one hand the control of the regulations for the protection of citizens, the economy and the state is becoming increasingly important. On the other hand, consumers and travelers as well as business and politics expect efficient border processes and effective border controls.


What happened so far

On September 12, 2017, the Swiss Parliament approved a total credit of CHF 393 million to finance the modernization and digitization of the Swiss Federal Customs Administration (FCA), thus initiating the DaziT digitalization and transformation program.


On April 10, 2019, the Swiss Federal Council also decided to fundamentally change the FCA and to change and reorganize it into the new Swiss Federal Office for Customs and Border Security (FCO). The renaming took place on January 1, 2022. With the organizational further development of the FCO, a structural change is taking place at the same time in order to make the best possible use of the new opportunities with DaziT. In particular, all operational employees will undergo the same basic training in all three areas of competence of the FCO – control of goods, persons and vehicles – with subsequent specialization in at least one of these areas.


Now, at its meeting on August 24, 2022, the Swiss Federal Council adopted the dispatch on the total revision of the Customs Act and the creation of a new framework law.


New framework law FCO-ETA

The new federal law on the general part of the collection of duties and the control of the cross-border movement of goods and persons by the Swiss Federal Office for Customs and Border Security (FCO-Enforcement Tasks Act, FCO-ETA) is intended to simplify and standardize all processes for the collection of duties and the control of the cross-border movement of goods and persons by the FCO. It provides for an end-to-end digital process that is intended to promote the automated verification of non-tax-related decrees.


The most important substantive innovations in the FCO-ETA are in particular:

  • A uniform procedural law applies – both for the ordinary assessment and for internal administrative appeals – to all levies that are to be levied by the FCO.

  • The uniform electronic procedure now recognizes the following three roles, which are involved in the assessment procedure and must fulfill different obligations according to their function:

* the person responsible for the goods

* the data controller

* the person responsible for transport


Example: A. AG sells a piece of furniture to Italy. It instructs B. AG with the goods declaration and C with the transport.

* person responsible for the goods: A. AG

* data controller: B. AG

* person responsible for transport C

  • The position of the tax debtor and the joint and several liability are linked to these three roles: The person responsible for the goods is the main tax debtor and will be prosecuted first. The previous joint and several liability of the other tax debtors is limited.

  • The procedure is conducted electronically. However, the FCO may provide for exceptions (e.g. for the tourist traffic).

  • The internal administrative legal procedure against assessment rulings has two levels: (1) objection procedure and (2) internal administrative appeal procedure. Other FCO rulings (e.g. permits) are subject to direct internal administrative appeal.

  • The time limit for raising an objection against an assessment ruling is one year. With the objection, for example, the previous correction (Art. 34 of the Swiss Customs Act) and cases of the previous provisional assessment (Art. 39 of the Swiss Customs Act or Art. 93 of the Swiss Customs Ordinance) are also handled. For the internal administrative appeal against the other rulings of the FCO as well as against objection decisions, a period of 60 days is provided.

  • Goods in small quantities and of insignificant value, which violate non-tax decrees or infringe intellectual property rights, can be destroyed in a simplified manner.

  • The FCO can make orders under a fictitious name and an undercover search in virtual rooms in order to detect infringements in its area of responsibility.

  • The scope of application of the non-penalized voluntary disclosure, which leads to refraining from criminal prosecution, is extended.

  • The use of tracking devices requires the existence of a criminal act according to the criminal act catalog and is approved by the compulsory measures court. In addition, important provisions are newly regulated at the legislative level.

The FCO-ETA only harmonizes the enforcement tasks of the FCO, but does not change the responsibility for enforcement. In particular, no enforcement tasks are transferred to the cantons; the previous responsibility is preserved.


Reduced Customs Duties Act

The current Swiss Customs Act is to be reduced to a purely fiscal decree. The envisaged Swiss Federal Act on Customs Liability and the Swiss Assessment of Customs Duties (Customs Duties Act, CDA) is to contain only the provisions relevant to the levying of duties (customs liability, customs assessment, customs debt and customs duties) and penalty provisions. The new FCO-ETA, on the other hand, will apply to the levying of import and export duties, procedural law, goods control, etc.


The FCO-ETA and the CDA will enter into force simultaneously. However, as long as the necessary technical basis for levying a tax is not yet available in the new information system of the FCO, the Federal Council may or will declare the provisions of the previous law to continue to apply instead of those of the new law.


Adaptation of decrees

As a result, numerous tax and non-tax decrees related to the FCO-ETA and the CDA should or must be amended (e.g. the Therapeutic Substances Act, the Environmental Protection Act or the Beer Tax Act). The duty to pay and the amount of the levies do not change.



What does this mean for my company?

The simplified processing of border formalities and taxation in Switzerland will reduce the administrative burden on companies and thus fundamentally ease the burden on the economy. However, digitalization will lead to costs for the economy for the adaptation of the systems. Positive effects of the total revision of customs law are expected above all for export and import-oriented SMEs and large companies, but also for transport and logistics companies.


Data protection is a very important aspect of digitalization. In terms of data protection law, DaziT requires a change in the legislative system in order to exploit the full benefits of digitalization on the one hand and to comply with data protection requirements on the other. The new law and all data protection-related developments in connection with the FCO-ETA were designed with the involvement of the Swiss Federal Office of Justice and the Swiss Federal Data Protection and Information Commissioner in accordance with the new Data Protection Act of September 25, 2020. By the time the FCO-ETA comes into force, the old data protection law should no longer be in force.


 

We are happy to assist you with questions regarding VAT and customs law, especially with regard to the totally revised customs law.


Best regards from your VAT/Customs team




Mónika Molnár Florian Hanslik Anita Machin


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