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COST OF LIVING

Switzerland: How to get money back when cross-border shopping in Germany

Crossing into Germany to go shopping is usually cheaper - and that’s before you add the tax savings. Here’s how you can claim back tax when shopping in Germany.

Shopping trolleys lined up at a German supermarket. Photo by Markus Spiske on Unsplash
Shopping trolleys lined up at a German supermarket. Photo by Markus Spiske on Unsplash

There are a range of reasons why most things are cheaper in Germany than in Switzerland. 

While there are some exceptions to this – the most notable one being petrol – generally speaking you pay a premium on goods purchased in Switzerland. 

EXPLAINED: Why is Switzerland so expensive?

If you shop in Germany, you can also save on VAT, which is generally 19 percent and added to most goods. 

Here’s what you need to know. 

What are the tax rules for shopping in Germany? 

Residents of Switzerland, as a non-EU country, do not need to pay VAT in Germany on purchases over 50 euros. 

Your country of residence rather than nationality is important here. 

Therefore, a German living in Switzerland and shopping in Germany does not need to pay the tax. 

A Swiss living in Germany however would need to pay the amount. 

Importantly, you need to physically be in Germany when you make the purchase. 

In order to qualify for the tax exemption, you must bring the goods back to Switzerland with you. 

The specific rules for this are laid out by German Customs here, but they need to be either in your carry on or checked baggage, or in a car that you are travelling in personally. 

These rules are to ensure people are buying the goods for themselves rather than intending to sell them on. 

What kind of goods? 

Goods bought in Germany and taken back to Switzerland are exempt from VAT. 

You will generally however be required to pay tax on services rendered or completed in Germany. 

For instance, bus or train tickets in Germany, restaurant bills, hotel stays, massages etc. 

There are also a range of rules which apply to vehicles. 

If you are getting your car repaired, filling up with petrol, affixing bumpers, mirrors or other additions or even getting a car wash, you will need to pay VAT. 

How do I get the money back? 

Unfortunately, you do not get a discount at the place of purchase.

Instead, you need to claim the money back after you have purchased the product on which you paid the tax. 

In most large stores or shopping centres, you will be able to do this on site. 

You need to have a copy of the receipt and fill in the VAT refund form (Ausfuhrschein) with your name, address and Swiss residency permit number. 

You can get one of these forms at larger stores or you can download it and print it here. 

You will need to do one for each invoice. 

Once you have done that, you can take the completed form to the German customs office (Zoll), which you can find at most border crossings and get the paper stamped. 

Then, you need to return the paper to the place of purchase, where they will issue with a refund of the VAT. 

Some stores require you to return after three months, some six and some 12, so be sure to check the store policy. 

Note that some online stores will automatically deduct the VAT if you have a Swiss delivery address. 

Cost of living in Switzerland: How to save money if you live in Zurich

One thing to keep in mind however is that Switzerland charges its own VAT, which is either 2.5 percent or 8 percent. More on that below. 

What’s with all this paper? 

For anyone who’s spent even a few hours in Germany, the country’s reluctance to embrace digital methods of payment and record keeping is clear. 

While cash remains king in many stores and restaurants, claiming back money from shopping in Germany is also a paper-heavy endeavour. 

Fortunately for people not so keen on paperwork, a change is afoot – although exactly when it will take place remains unclear. 

In February 2022, the German government announced it had kicked off a project to make a digital export certificate possible. 

In addition to saving time and paper, the government indicated it expected to save around 6.2 million euros in personnel expenses as around 100 customs officers are currently assigned to the Swiss border alone. 

No deadline has been given for when the change will come into effect. 

Cost of living: How to save on groceries in Switzerland

Swiss customs rules

When bringing goods into Switzerland, you will need to pay VAT if the amount exceeds 300 francs. 

While border patrols are rare, those who make a habit of exceeding this amount – even if it is for goods for personal use – run the risk of falling foul of the authorities. 

There are several different rules in place for bringing in different items, including meats, cheeses and alcohol. 

The limits for each of these items can be found here. 

Keep in mind that while the CHF300 applies now, Switzerland is set to reduce this to CHF50 in the future – although final approval of this has not yet been secured. 

Tax change: Switzerland to introduce 50 franc limit on cross-border shopping

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For members

TAXES

EXPLAINED: How to save money on your taxes in Germany

Einkommensteuererklärung - or income tax declaration - may well be one of the most terrifying words in the German language. But with several available deductions, you may want to file even if you don’t have to. We spoke to experts to find out how to do it.

EXPLAINED: How to save money on your taxes in Germany

In a crowded field, few things feel as bureaucratic in Germany as the tax code. But as with so many things here, there’s an advantage in planning a bit ahead of time, and keeping the right paperwork as you go along. From my own personal experience having paid tax in Canada before moving to Germany, many of the possible deductions you can get here might not be available where you’re originally from. That’s why it’s worth checking to see what you can save money on.

It’s currently tax season: the 2020 tax return deadline for those who use an adviser or Steuerberater is May 31st 2022 (it was extended from December 31st 2021 due to the pandemic). Meanwhile, many residents in Germany will have to file their 2021 tax returns by the end of July, with extensions available to those who use a tax advisor.

And, While some salaried employees with very straightforward cases may be able to get away without filing one as their taxes are often simply deducted straightaway from their monthly pay, it often pays to do it. 

READ ALSO: German tax deadline extended due to Covid pandemic

Who has to complete a tax return in Germany?

Perhaps most obviously, self-employed freelancers and small business owners resident in Germany have to file a German tax return every year. But so do a host of other people. These include married partners with big differences in income, people claiming certain welfare benefits, or people with multiple sources of income – such as those who might have a salary and rental income. If you don’t fall into any of these categories, you can still file a return and get some money back.

A calculator next to a tax return form.

A calculator next to a tax return form. Many people can get money back from submitting a tax return. Photo: picture alliance / dpa | Oliver Berg

What job-related expenses can I deduct and how can I prove them?

It’s not just the self-employed who can claim a host of tax breaks. If you’re a salaried employee, you may also be able to claim everything from job-related clothing to training courses you’ve paid for yourself and not been able to claim as expenses with your employer. If you buy a work-related book or subscribe to a trade magazine your employer doesn’t reimburse you for, you can deduct that from your tax burden as well. The costs of membership in professional organisations are also fair game.

“Any form of job-related development course is tax deductible, whether you’re a freelancer or not,” says Claudia Müller, Founder of the Female Finance Forum and author of Finance, Freedom, Provision. The way to financial independence. “Also, if you had to travel to the course, you can keep the train ticket and hotel receipt. The dates on them will obviously correspond to the course date—so you can clearly prove you took the trip for professional development and claim the travel costs.”

READ ALSO: Everything you need to know about your German tax return in 2022

Müller also advises keeping the receipts for job-related clothing, although claiming that as an expense is easier for some professions than for others. For example, a chef can easily argue their uniform, if they have to pay for it themselves, is something they won’t wear outside of work. Other cases are less straightforward.

“Clothing is a bit tricky because men can theoretically wear a suit to a non-work related occasion, like a wedding. So they won’t be able to hand in those receipts. But women sometimes can deduct certain business clothing they really wouldn’t normally wear outside of work,” says Müller.

With the Covid-19 pandemic having made home office more common in Germany, both employees and freelancers can deduct furniture, computer, stationary, and Internet costs, among others. 

What household-related costs can I deduct?

When I had a dishwasher technician come to my home for a repair recently, he told me I’d be getting a long receipt via email and that I should save it for my tax return. Having had no such available tax credit when I lived in Canada, I was curious about what else might qualify. It turns out plenty does – whether you rent or own the place you live in.

“As long as you’re using a cashless payment, such as a wire transfer, you can claim some of the costs of household-related services like gardeners and cleaners – or maintenance costs such as home repairs or a visit from your chimney sweeper,” says Dirk Maskow, an independent tax consultant based in both Berlin and Düsseldorf.

A man places dishes inside a dishwasher.

A man places dishes inside a dishwasher. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

“If you rent your place and your landlord passes on any service costs to you, the tenant, they’re obliged to provide you with the necessary statement, which you can use as documentation.”

READ ALSO: Everything you need to know about paying taxes in Germany

What family-related costs can I deduct?

Germany is a country that prides itself on its family-oriented social safety net. That’s part of what makes its tax code so complex, but there’s plenty of possible credits for different life situations. Parents can claim an allowance for each child until they turn 25, and even longer if they can prove their enrolment in higher education for adult children older than 25 – even if they’re living away from home.

Two-thirds of childcare costs are tax deductible too. “For that, again, make sure you keep all the receipts and don’t pay by cash—so you can prove exactly what you paid and when,” says Maskow. “Public schools are of course free in Germany, but even about 30 percent of private school fees – up to a maximum of €5,000 – are tax deductible too.”

It’s not just institutional education or childcare you can claim either. In Germany, even certain babysitting expenses are tax deductible. “You can even get the children’s grandparents to come over and deduct travel costs,” says Müller. “If they need to take the train to come look after the kids, make sure you save the receipt.”

Certain out of pocket healthcare costs might also be tax deductible in certain cases. “My tax advisor always asks me for our medical expenses, right down to if we went to the dentist and got a cleaning,” says Kathleen Parker, Managing Director of Red Tape Translation. “The right filing system can make a load of difference to help keep track of it all. If Excel and paper isn’t cutting it anymore, there’s lots of great cloud-based software that can help you out.”

Vocabulary

Tax – (die) Steuer

Wage Tax (what employees have taken off their pay) – (die) Lohnsteuer

Tax return or tax declaration – (die) Einkommensteuererklärung

Tax consultant or advisor – (der) Steuerberater/(die) Steuerberaterin

As with all of our tax and financial summaries, this is a guide only and should not be taken to constitute specific and tailored financial advice. For tax advice which is personalised to your situation, please contact an accountant or tax specialist. 

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