The company is now recommending Swiss shoppers use other Amazon sites in Europe like Amazon.de, Amazon.fr or Amazon.co.uk. The impact of the move is estimated to be CHF 65 million compared to an estimated 575 million Swiss francs in deliveries from amazon.de, for example. However, it’s more a matter of choice as Amazon.com has items that cannot be found on Amazon.de. Those products include hard-to-find books, records and antique items.
Amazon has had more than 12 months to find a solution for changes to the Swiss VAT system but has been unable to do so. A spokesperson for the Swiss tax authorities said that by stopping deliveries to the Swiss market from the US, Amazon would not be dodging VAT as this would be payable when deliveries were made to Switzerland from its EU sites.
This has upset a lot of people – not just the Swiss. While Amazon may not need the Swiss market it has generated bad press and has perpetuated Amazon has an internet bully. Amazon makes around 600 million Swiss francs through its portals with Swiss customers – about ten percent on Amazon.com.
Switzerland made this ruling because they wanted to protect local merchants and smaller competitors from large foreign companies. Amazon.ch will not exist, but Amazon will gain even more weight in Switzerland via the European platforms.
This isn’t the first time Amazon has fought taxes. In the United States, last year, the tech giant didn’t pay any federal taxes despite making a profit of 11.2 billion, nearly double the $5.6 billion it earned the previous year. It will be the second year in a row that Amazon hasn’t pay any federal taxes.