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DRIVING

Why electric car owners in Switzerland will have to pay tax in future

Switzerland has scrapped a tax exemption for imports of electric cars, whose growing presence on Swiss roads has cut into tax revenues.

Why electric car owners in Switzerland will have to pay tax in future
No more tax exemptions for EVs in Switzerland. Image by andreas160578 from Pixabay

The federal government said in a statement that from January 1st, 2024, electric cars would be subject to the same 4-percent import duty imposed on traditional fuel vehicles.

E-vehicles had been exempt from the tax since its introduction in 1997.

The government had then wanted to create incentives for the use of electric cars.

But it said “the situation has now changed significantly”.

“The Federal Council takes the view that the exemption from duty as a incentive is no longer necessary, given the sharp rise in the share of e-vehicles in total car imports and the convergence of prices,” it said.

Between 2018 and 2022, annual imports of e-vehicles jumped nearly sixfold, from around 8,000 to more than 45,000.

In the first half of 2023, around 30,400 e-vehicles were imported, marking a 66-percent hike from the same period a year earlier, it said.

This dramatic increase means that e-vehicles made up nearly a quarter of total imports in the first half of this year, up from 16 percent in the first half of 2022.

“This increase led to an appreciable decrease in receipts from automobile duty,” the government said.

For all of 2022, the tax shortfall was around 78 million Swiss francs, and this year the shortfall is expected to swell to 100-150 million Swiss francs, it said.

If the exemption had continued, it estimated that the cumulative tax shortfall for the years from 2024 to 2030 would have been between 2 and 3 billion francs. 

“By making e-vehicles subject to automobile duty, the Federal Council is acting to redress this shortfall,” the statement said.

The government also highlighted the industry’s estimate that the cost of producing e-vehicles will be in line with fossil fuel vehicle production by 2025.

“It should therefore still be possible to achieve a profit margin in the future, without increasing prices for the consumer and without state subsidies,” it said.

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TAXES

Switzerland to lower the obligatory TV license fee

Not everything in Switzerland is getting more expensive: the annual radio and television fee is set to become cheaper.

Switzerland to lower the obligatory TV license fee

The current fee (also referred to as ‘tax’) of 335 francs a year per household will drop to 312 francs by 2027, and then to 300 francs from 2029, the Federal Council announced on Wednesday. 

The main goal of this reduction is to alleviate the financial burden that the license fee places on many households and businesses alike.

However, there is another reason for this move as well.

This measure is also a concession of sorts to the “200 francs is enough” initiative launched by some political parties, which want to cut the fee even more significantly than the government does.

This will not be the first time this tax is reduced: it fell from the original 451 to 365 francs in 2019, and to the current 335 in 2021.

What is this fee anyway?

Many foreigners who move to Switzerland are surprised to discover that they are automatically charged a television and radio license fee — even if they don’t own either.

This fee is compulsory for most households, though some can be exempted  from it (see below). The amount of 335 francs is the same for all private homes, regardless of how many people live there or how many TV sets they have.

The invoice is automatically sent out once a year — unless you opt for quarterly billing —by a company called SERAFE, which collects this fee on behalf of the government from private households. The Federal Tax Administration is responsible for collections from businesses.

Where does this money go?

The 1.37 billion francs collected annually is used to fund public broadcasters like the Swiss Broadcasting Corporation and other TV and radio stations across Switzerland.

“In this way, the public service will be guaranteed in all parts of the country and democracy will be strengthened; the entire country and all its inhabitants will benefit”, according to the Federal Office of Communications (OFCOM), which is responsible for the scheme.

This map shows which stations in your area are subsidised by the government:

Image by OFCOM

Who is exempted from paying this fee?

Several categories of households are not subject to this tax:

  • Households with persons who receive supplementary Old Age, Survivors’ and Invalidity insurance benefits from the federal government
  • Households with no means of receiving radio, and have no computer, no tablet, no smartphone, and no car radio (admittedly a very limited number of people)
  • Households of deaf-blind people, provided that there are no people liable for the fee living in the same household
  • Households of diplomats
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