Cross-border workers: How much tax does Switzerland pay to home countries?

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Cross-border workers: How much tax does Switzerland pay to home countries?
France and Italy got their money from taxes collected in Switzerland. Photo by Fabrice Coffrini / AFP

This week the cantons of Geneva and Ticino have paid the total of 405 million Swiss francs to France and Italy as financial compensation for their cross-border workers.


An agreement between Switzerland and the neighbouring countries, which is aimed at avoiding double taxation, authorises cantons to deduct withholding tax from cross-border workers' salaries.

While most of this money remains in Switzerland, a portion is paid to the employees’ respective countries of residence or regional authorities in that country.

This week Geneva paid 315 million francs from taxes pulled in 2019 to the French départements from where some 87,000 workers commute to their jobs in the canton each day. 

Under the deal worked out in 1973, 3.5 percent of the tax collected from cross-border workers goes to France, with 76 percent of that total transferred to Haute-Savoie and the rest to Ain.

This sum is intended to compensate for the public charges incurred by cross-border workers in their French municipalities. The funds are supposed to be used for infrastructure projects of regional importance, in particular those managing mobility on both sides of the border.


READ MORE: Coronavirus: Your rights as a cross-border worker in Switzerland

Ticino authorities had authorised the payment of nearly 90 million francs to Italy, collected from approximately 67,000 frontier workers employed in the canton.

Cross-border workers have taxes deducted from their wages by their Swiss employers. Their salary statements must then be shown to tax authorities in their home country as proof of payment.

For French citizens things are a bit different. Those who work in cantons other than Geneva have their taxes collected by French authorities. However, if their place of employment is Geneva, they pay taxes in Switzerland.

There are also special rules for German workers, who work mainly in the Basel area. 

If they reside in Germany but spend more than 60 nights per year in Switzerland for work-related reasons, they pay taxes in Switzerland rather than in Germany.

During the Covid-19 pandemic, when many frontier employees were not commuting to their Swiss jobs, Switzerland concluded deals with France and Germany relating to the taxation of those who were working from home.




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