Dropshipping from Switzerland: a growing model
Dropshipping is an e-commerce business model where the seller does not physically hold inventory: when a customer orders from your online shop, the order is forwarded to the supplier (often in China, Europe or the USA), who ships directly to the end customer. You act as a commercial intermediary, collect payment from the customer and pay the supplier at a lower price.
In Switzerland, dropshipping is perfectly legal, but it presents specific challenges: VAT treatment in international triangular transactions, responsibility for duties and customs clearance when goods enter the Swiss customs territory, and accounting for a business that has no physical warehouse but must still record sales, cost of goods sold and foreign payments.
This guide covers all practical aspects: from the legal flow of the operation to accounting entries, from VAT management to Swiss customs, to EUR, USD or CNY payments to suppliers and returns management. With concrete examples for those using AliExpress, CJ Dropshipping or European suppliers.
How dropshipping works: the legal flow
Dropshipping creates a three-party structure: you (Swiss seller), the foreign supplier and the Swiss end customer. Here is the step-by-step flow:
Customer orders from your shop
The customer purchases on your website (Shopify, WooCommerce, etc.) and pays the selling price including Swiss VAT (if you are VAT-registered). You issue an invoice or order confirmation to the customer with your Swiss business address.
You forward the order to the supplier
You receive the order and transmit it to the foreign supplier (AliExpress, European wholesaler, etc.). You pay the purchase price — generally in EUR, USD or CNY — and provide the end customer's shipping address.
The supplier ships directly to the customer
The supplier prepares and ships the goods directly to the customer's address in Switzerland. You never physically touch the product. The parcel is dispatched from abroad with the necessary customs data.
The goods pass through Swiss customs (BAZG)
The parcel enters Switzerland and is processed by the Federal Office for Customs and Border Security (BAZG). Depending on the value, customs duties and import VAT may apply. For shipments where the calculated VAT is below CHF 5, import VAT is not collected (de minimis threshold).
The customer receives the goods
The end customer receives the parcel. In case of duties, they may need to pay customs clearance on delivery (postal COD or courier). This is one of the critical pain points in dropshipping: the customer may not expect additional costs.
VAT and triangulation: who pays what
VAT management in dropshipping is complex because it involves three jurisdictions: the supplier's country, Switzerland and potentially the EU. Here are the main scenarios:
VAT obligation for the Swiss dropshipper
If your annual turnover exceeds CHF 100,000, you are required to register for VAT with the FTA. Even below this threshold, you can register voluntarily. Sales to Swiss customers are subject to Swiss VAT (8.1% standard rate, 2.6% reduced rate for essential goods).
Import VAT
When goods enter Switzerland, import VAT is calculated on the value of the goods + duties + shipping costs. If the calculated VAT amount is less than CHF 5 per shipment, it is not collected (de minimis threshold). This corresponds to a goods value of approximately CHF 65 at the 7.7% rate. If you are VAT-registered, you can deduct import VAT as input tax.
Triangulation: EU supplier → Swiss customer
When the supplier is in the EU, the sale from supplier to you is typically an export (EU VAT-exempt) if the goods physically leave the EU. Importation into Switzerland triggers import VAT. You invoice the customer with Swiss VAT. There is no double taxation if the documentary chain is correct.
Triangulation: non-EU supplier (China) → Swiss customer
When the supplier is in China (AliExpress, 1688, CJ Dropshipping), there is no VAT in the country of origin. Import VAT applies upon entry into Switzerland. For low-value parcels sent by post, BAZG often does not collect duties and VAT due to the de minimis threshold. Note: since 2024, online platforms (marketplaces) may be considered importers of record for shipments under CHF 150.
Customs responsibility: who clears the goods
In dropshipping, goods enter Switzerland shipped directly from the foreign supplier. The crucial question is: who is responsible for customs clearance and who pays the duties?
Importer of record (IOR)
The importer of record is the person or entity legally responsible for the customs declaration and payment of duties. In classic dropshipping, the IOR is either the recipient (your customer) or you as the seller, depending on the arrangements. If you use DDP (Delivered Duty Paid), you pay the duties; with DAP (Delivered At Place), the customer pays.
Duty exemption threshold
For postal shipments, Switzerland applies a threshold: if the calculated VAT on the goods is less than CHF 5 (goods value approximately CHF 65 at the 7.7% rate), neither VAT nor duties are collected. For shipments via express courier (DHL, FedEx, UPS), customs clearance always takes place and the courier charges a clearance fee (typically CHF 11–18).
Customs tariffs by product category
Swiss customs duties are calculated by weight (not by value) and vary by product category according to the Swiss Customs Tariff (Tares). For lightweight, high-value products (electronics, accessories), duties are often negligible. For heavier products (textiles, food), they can be significant. Check the BAZG online Tares for specific rates.
Customer complaints about customs charges
The most common problem in dropshipping: the customer orders for CHF 29.90 and then receives a payment request of CHF 15–20 for customs clearance and duties. This generates complaints, refund requests and negative reviews. Transparency is key: clearly state in your terms of sale that goods are shipped from abroad and that customs duties may apply.
Important: if you regularly sell in Switzerland with shipments from abroad and your turnover exceeds CHF 100,000, the FTA may consider you a systematic importer and require you to register as a VAT importer. Discuss with your fiduciary whether it makes sense to use a Swiss customs warehouse or local fulfilment service for shipments above a certain threshold.
Accounting without inventory: how to record transactions
In dropshipping you have no physical warehouse, so the chart of accounts is simplified: no inventory account, no stock variations. However, you must correctly record sales, cost of goods sold, duties and exchange rate differences. Here are the standard entries:
| Transaction | Debit | Credit | Notes |
|---|---|---|---|
| Sale to customer | 1100 Accounts receivable | 3200 Sales revenue / 2200 VAT payable | Invoice to customer with Swiss VAT (if registered). Record gross, then split VAT. |
| Cost of goods sold (COGS) | 4200 Purchases of goods | 2000 Accounts payable | Price paid to foreign supplier. Record in CHF at the exchange rate on the order date. |
| Payment to supplier | 2000 Accounts payable | 1020 Bank (EUR/USD/CNY) | Actual payment. Any exchange rate differences go to 6960 FX differences. |
| Duties and customs clearance | 4200 Purchases of goods / 1170 Input VAT | 1020 Bank | Duties → cost of goods sold. Import VAT → deductible input tax (if VAT-registered). |
| Return and customer refund | 3200 Sales revenue / 2200 VAT payable | 1100 Accounts receivable | Credit note. Reverse sale and VAT. COGS remains if you don't recover the goods from the supplier. |
Supplier payments: managing EUR, USD and CNY
Dropshipping suppliers almost always operate in foreign currency. Managing payments efficiently and recording exchange rate differences correctly is essential:
Multi-currency business account
Open a multi-currency business account with Wise Business, Revolut Business or a foreign currency account at your Swiss bank. Holding balances in EUR and USD avoids double conversions CHF→EUR→CHF and reduces exchange costs by 60–80% compared to traditional credit card payments.
Exchange rate: which one to use in accounting
For accounting entries, use the exchange rate on the day of the transaction (order date for COGS, payment date for settlement). The FTA also accepts the monthly average rate published by the Federal Tax Administration. Differences between the recorded rate and the actual rate go to account 6960.
PayPal, Stripe and prepaid cards
For payments on AliExpress or similar platforms, PayPal and Revolut/Wise prepaid cards are the most common options. Note: PayPal charges a 3–4% margin on currency conversion. Wise/Revolut cards offer the interbank rate with a 0.3–0.6% margin. Always keep payment receipts as accounting vouchers.
Supplier invoices: what to keep
Even if AliExpress does not issue a formal invoice, keep the order confirmation, payment screenshot and shipment tracking. These documents serve as evidence for cost of goods sold. For B2B suppliers (CJ Dropshipping, wholesalers), always request a commercial invoice with product details and incoterms.
Year-end exchange rate differences
At year-end, foreign currency balances (EUR, USD, CNY) must be revalued at the FTA closing rate (31 December). Positive or negative differences are recorded in account 6960 FX differences. For a dropshipper with significant CNY volumes, these differences can be material.
Managing returns when you don't hold stock
Returns in dropshipping are more complex than in traditional e-commerce, because you cannot simply ask the customer to ship the goods back to your warehouse. Here is how to handle them:
Refund without physical return
For low-value products (under CHF 30–40), the most common practice is to refund the customer without requesting the return. The cost of the refund is lower than that of international return shipping. In accounting terms, you reverse the sale but not the COGS — the product is a loss.
Return to the foreign supplier
For higher-value products, you can ask the customer to ship back to the supplier (if the supplier accepts it). Note: international shipping from Switzerland is expensive and Chinese suppliers rarely accept returns. Check the supplier's return policy in advance and offer a local address if possible.
Local return address (fulfilment centre)
Some dropshippers use a local fulfilment service (e.g. in Switzerland or Germany) as a return address. The fulfilment centre receives the return, verifies it and manages the credit. This improves customer experience but adds a fixed cost. Evaluate whether return volumes justify the service.
Accounting aspects of returns
The return generates a credit note to the customer: you reverse the revenue and VAT on the sale. If you obtain a refund from the supplier, you also reverse the COGS. If you do not get a refund (typical with AliExpress), the COGS remains as an incurred cost. Return shipping expenses are an operating cost (account 6000–6999).
Practical advice: define a clear return policy before you start selling. Specify timeframes, conditions and who pays for return shipping. Swiss law (CO) does not provide a general right of withdrawal for e-commerce (unlike the EU's 14-day rule), but a transparent policy reduces disputes.
Practical tips for the Swiss dropshipper
- Register for VAT before exceeding CHF 100,000 in turnover: you can deduct import VAT and VAT on business expenses (hosting, advertising, software). Voluntary registration is almost always worthwhile if you sell B2C in Switzerland.
- Clearly state in your terms of sale that goods are shipped from abroad and that customs charges may apply. Transparency prevents 90% of complaints and refund requests.
- Use a Wise Business or Revolut Business account to pay suppliers in EUR/USD/CNY: you save 2–4% compared to traditional credit card payments. Over 10,000 annual orders, that is hundreds of CHF in savings.
- Automate your accounting by connecting Shopify/WooCommerce to AccountEX: every sale is automatically recorded with the correct VAT, COGS and margin. No more manual entries at month-end.
- For products valued above CHF 65, consider a fulfilment service in Switzerland (or Germany for EU customers): bulk customs clearance costs much less than per-parcel clearance and the customer receives no surprises on delivery.
- Keep ALL supplier payment receipts (AliExpress screenshots, PayPal/Wise receipts, order confirmations): they serve as evidence for cost of goods sold and for any FTA audit. The law requires retention for 10 years.
- Use AccountEX to manage your dropshipping shop accounting: automatic sales recording, multi-currency bank reconciliation, VAT calculation and real-time reporting — all in one place, compliant with Swiss law.
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