Sales tax on exports to Switzerland

Hey everyone!

My US company (let’s call it Company X, and we're on a Sales Tax registered system) is about to start exporting food to Switzerland. My firm, X, will buy goods from a local US supplier, Firm Y (also Sales Tax registered), and then export them to Firm Z, which is based in Switzerland. I need to figure out my tax obligations here—specifically, what am I actually paying in Sales Tax?

Here is the breakdown:

X buys food for $100 from Firm Y
- Sales Tax $25 (25%)
Net cost without Sales Tax: $80

X sells the food to Firm Z for $200
- Sales Tax $50 (25%)
Net amount without Sales Tax: $150

So, I end up owing the government $25 in Sales Tax, right? And once it hits Switzerland, I either deal with zero customs or just pay the Swiss Sales Tax on the invoice amount.

Does the IRS actually care about the granular details—like specific freight forwarding fees, trucking costs, gas, lodging, meals, drinks, etc.? Or does the US tax authority mostly just care about the final invoice sent to Firm Z in Switzerland? I'm asking mainly regarding Sales Tax, though obviously, I know I have to book all export-related expenses.

Thanks a lot.

Best,
Dana Jones77

Dana Jones77 said:Hey everyone!

My US company (let’s call it Company X, and we're on a Sales Tax registered system) is about to start exporting food to Switzerland. My firm, X, will buy goods from a local US supplier, Firm Y (also Sales Tax registered), and then export them to Firm Z, which is based in Switzerland. I need to figure out my tax obligations here—specifically, what am I actually paying in Sales Tax?

Here is the breakdown:

X buys food for $100 from Firm Y
- Sales Tax $25 (25%)
Net cost without Sales Tax: $80

X sells the food to Firm Z for $200
- Sales Tax $50 (25%)
Net amount without Sales Tax: $150

So, I end up owing the government $25 in Sales Tax, right? And once it hits Switzerland, I either deal with zero customs or just pay the Swiss Sales Tax on the invoice amount.

Does the IRS actually care about the granular details—like specific freight forwarding fees, trucking costs, gas, lodging, meals, drinks, etc.? Or does the US tax authority mostly just care about the final invoice sent to Firm Z in Switzerland? I'm asking mainly regarding Sales Tax, though obviously, I know I have to book all export-related expenses.

Thanks a lot.

Best,
Dana Jones77

Exporting goods is exempt from Sales Tax, so you don't charge it.
Because of that, the tax authorities mostly care about the Bill of Lading and the Customs Declaration.
Talk to your freight forwarder about the paperwork; it's probably best to verify everything before the export happens.

Thanks a lot. So, just to be clear, in my specific case, I won't be paying that $2 difference in Sales Tax? And I'm assuming I can't even try to claim a deduction for it, right? Or how would the math actually shake out for me? Also, obviously, Switzerland isn't part of the European Union. Does that factor into this at all? Thanks!! 👍

Dana Jones77 said:Thanks a lot. So, just to be clear, in my specific case, I won't be paying that $2 difference in Sales Tax? And I'm assuming I can't even try to claim a deduction for it, right? Or how would the math actually shake out for me? Also, obviously, Switzerland isn't part of the European Union. Does that factor into this at all? Thanks!! 👍

You can claim the input tax. You just handle the monthly Sales Tax settlement.
Regarding the export paperwork, it’s probably best to consult with a customs broker,
and make sure to verify your EORI number.......

casualorca5 said:You can claim the input tax. You just handle the monthly Sales Tax settlement.
Regarding the export paperwork, it’s probably best to consult with a customs broker,
and make sure to verify your EORI number.......

Thanks a ton!!