Switzerland TAX refund to hemp producers

Switzerland TAX refund to hemp producers

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Switzerland is returning 33 million francs to cannabis light producers

In favor of three plaintiffs, Switzerland tax refund by the Swiss Federal Supreme Court ruled that cannabis is no substitute for tobacco and is thus untaxable in compliance with Tobacco Tax Law. As a result, tax refunds for cannabis producers in Switzerland are estimated to be around $34.5 million (CHF 33 million). It will include remuneration value.

Whilst it is especially difficult, in Germany, to legalize many suppliers of the most popular cannabis products, Switzerland tax has now, following its February decision, set out its duty to reimburse the respective participants in the cannabis sector with illegally obtained tax revenue.

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Switzerland tax is paid from public funds falsely raised

In favor of three applicants at the start of this year, the Swiss Supreme Court found that cannabis is not a tobacco substitute and is therefore not taxable under the Tobacco Tax Act. However, given that cannabis had previously been sold at a 25% premium for three years, the government is now moving to public funds to reimburse property owners for the tax revenue they collected wrong. In turn, tax refunds for cannabis growers in Switzerland amount to about $34.5 million (CHF 33 million).

Thomas Bär is the owner of CANWAY Switzerland LLC (formerly Green Passion LLC), a Swiss company that deals with the marketing of cannabis light and derivatives. Thanks to the civil commitment of this accountant, an epoch-making change occurred for the Swiss market of low THC cannabis last week: the customs authorities, following the decision of the Federal Supreme Court, were forced to return the previously requested taxes (when cannabis was subject to the tobacco taxation regime) for a total sum of 33 million Swiss francs. The repercussions of this ruling have already crossed the borders of the Confederation to take a European breath.

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Switzerland is returning TAX, 33 million francs to light cannabis producers , cannabis light
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When did the story of this civil battle begin?

 The first appeal was submitted on August 28, 2017, by 3 cannabis light companies, mine, Greenpassion, Swiss Cannabis, and Artemis. Of all the Swiss realities, only the three of these companies decided to fight for their rights as entrepreneurs. Canway received a negative response to this appeal from the customs authorities of Federal Switzerland. However, they decided to appeal before the Federal Administrative Court. On March 11, 2019, this Court also wronged them by assuming that cannabis inflorescences were mainly used as a substitute for tobacco and as such should be subject to the same taxation. Despite this second unfavorable decision they decided not to be discouraged and brought everything before the Federal Supreme Court which on January 29, 2020, decided in their favor.

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The decision made the Swiss cannabis company owners pleased with the conclusion

This will certainly be necessary, in terms of running costs for workers, rent and energy, for the cannabis companies which had previously paid too high taxes to retain the sum due therefrom and to book them as income. Customers will also profit, but it is not yet specifically planed – how exactly is it unclear.

Overall, the people of business in Swiss legal cannabis seem very happy with the growth, but it has been stated clearly that overall cannabis liberalization has a lot more benefits. Jobs and increased tax revenues would be two positive things that would bring in legal cannabis immediately.

During the next Hemp Journal Live, however, what happens to dealers during Germany will be revealed to all stakeholders. Several times already in the press was the company of Blubb-Blubb 420, which once sold CBD flowers because the police always claimed that hemp just did not belong to legally sell.

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Who decided to undertake this legal battle?

The company decided to wage this legal battle for several reasons, the main one being to force the government to legislate specifically on cannabis. The idea was that the application of tobacco taxes to our sector was unconstitutional, precisely because the Constitution states that only with the law can we decide the type of taxation for a new product such as in our case inflorescences with low content of THC and high CBD. There were also doubts about whether the government had decided to apply tobacco taxes also on sales already made, retroactively, and this also proved to be a step that did not comply with the Constitution.

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Switzerland is returning TAX, 33 million francs to light cannabis producers , cannabis light
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How have things changed since the Supreme Federal Court decision?

In Switzerland, CBD inflorescences were considered until this judgment as a substitute for tobacco. As of January 29, 2020, cannabis flowers with low THC content (<1% THC) are no longer subject to tobacco taxes which amounted to 25% of the retail sale price. Besides and as a consequence, the minimum VAT value of 2.5% has become applicable and no longer the previously applied value of 7.7%.returns millions of francs

Switzerland is paying back millions of francs in taxes, thanks to the work of Thomas Bär and other Swiss cannabis light entrepreneurs

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Switzerland is returning TAX, 33 million francs to light cannabis producers , cannabis light
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How this would achieve the success of this magnitude?

To be honest, getting the second negative decision from the Federal Administrative Court was a big hit. But they never gave up and we took our requests to the end. Fortunately, the Swiss system is strong and justice prevails.

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Switzerland is returning TAX, 33 million francs to light cannabis producers , cannabis light
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What prospects does this decision open for the Swiss cannabis light market?

First, the 33 million fresh francs injected into the Swiss market. For many manufacturers, this is a nice relief because 25% of the selling price was a burden. And then the most interesting prospects open up outside of Switzerland, in fact, various operators from countries such as Luxembourg and Belgium, countries that had followed the taxation of cannabis light as if it were a substitute for tobacco. Then these are taking an interest to receive the papyri of the cause to pursue the same type of appeal in their respective countries.

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