VAT refund only on orders over €50
Germany seems to want to introduce a minimum purchase amount for cross-border shopping. The Swiss will only be able to claim a refund of value-added tax on purchases of €50 or more. The aim is to lighten the burden on customs.
According to sda/dpa, German Finance Minister Olaf Scholz of the SPD wants to regulate the refund of value-added tax for tourists from Switzerland. The federal cabinet is to decide on the introduction of a de minimis threshold of up to €50.
Swiss tourists will therefore only be refunded VAT when their purchases reach this amount. German government circles have confirmed a report in the "Südkurier", a Constance newspaper. The aim would be to relieve the German customs authorities, who have to deal with a great deal of bureaucracy when it comes to refunding taxes at the border. The advantages and disadvantages of a de minimis threshold have long been the subject of controversy.
The plan to introduce a de minimis threshold for VAT refunds to tourists from Switzerland has been widely accepted by German businesses in border regions. However, they were pleased that the German Ministry of Finance had lowered the initially planned threshold of €175, notes a representative of the German Chamber of Industry and Commerce (IHK).
A digital solution in the pipeline
Also, this is only a temporary measure until digital processing of VAT refunds is introduced. Many members of the Chamber of Commerce and Industry have been working towards this and have been pleased that Berlin has taken their concerns on board. Like the IHK, the Handelsverband Südbaden also protested against a de minimis threshold of €175 and collected thousands of signatures from trade employees. The Chamber of Commerce and the trade association warned that many jobs would be lost in border regions. Indeed, no longer able to take advantage of the VAT refund, tourists from Switzerland would no longer be so inclined to come and shop in Germany.
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