I want to start my dropshipping site, but I still did not find the right formula in regards to tax.
I am dropshipping from China and selling to Switzerland. Problem is that usually Switzerland charges 8% VAT on imported goods. Since I have to charge VAT to my Swiss clients, once they receive the goods they would also be required to pay a second time the VAT since the item was imported from abroad.
So in fact they are paying twice which is wrong. When I talked to the tax office here, they told me that I could ask for the items to be delivered to my office (i would then be responsible for paying the VAT import tax) and then ship it to the buyer in Switzerland. Through that they would only pay the VAT once, when they purchase through my store. This scenario though increases costs since I will have to re-ship the item once it arrives to me and will only add further delay to the delivery.
The other scenario would be to use a company outside Switzerland. In that case, I am not obliged to charge VAT to Swiss clients (since the registration of my shop would be abroad and not in Switzerland). In that case, they would pay the VAT once the item is delivered to them and only once. So far this is the best scenario I can think of...
What's the best scenario you think? How do other dropshippers do it?