Will Switzerland extend the beneficial tax arrangements for cross-border workers?

During the coronavirus, Switzerland and France agreed to relax its taxation rules for cross-border workers. A new proposal hopes to see that arrangement continued.

Will Switzerland extend the beneficial tax arrangements for cross-border workers?
A barricade at the Switzerland-France border. Photo: FABRICE COFFRINI / AFP

Advocates of extending the plan, including the Association of Swiss Employers, say that not only should it be extended, but that it should be made permanent when the country emerges fully from the coronavirus crisis. 

As reported in the NZZ, a number of Swiss companies see the benefit of encouraging their workers to work from home, either permanently or on a part-time basis. 

Under the deal, people working from home were treated as if they were working from the office in Switzerland. 

Prior to the deal, workers could work a maximum of one day a week from home. If they exceeded this, they would be taxed in their country of residence rather than in Switzerland. 

Advocates of keeping the new rules in place say they are beneficial for employee health and well-being as well as reducing the risk of transmitting the virus across borders. 

With France's tax and social security contributions usually much higher, companies in Switzerland say they cannot afford to pay both the higher Swiss wages along with these inflated contributions. 

'A pragmatic and sensible response to the crisis'

After the outbreak of the virus, working from home was encouraged by federal and cantonal authorities for anyone who was able to do so, but for this to be possible deals had to be struck quickly between Switzerland and neighbouring countries.

Under normal circumstances a worker who spent more than 25 percent of their working week at home, in France for example, would have to re-register under France's social security system rather than the Swiss one.

READ: How Switzerland avoided a coronavirus 'catastrophe' by protecting cross-border workers 

Tax treaties between France and Swiss cantons would also be flouted if workers stayed at home rather cross the border into Switzerland.

But agreements were quickly drawn up between France and Swiss authorities that essentially allowed workers to be based at home, rather than travelling to Switzerland without it impacting their social security and tax status.

“The overall principle applied during the border closures is that cross-border workers should continue to be subject to the same tax and social security as if they had continued to work in their normal location, when in fact they were working at home in their country of residence,” said Daniel Foster Director in global mobility services for KPMG, told The Local Switzerland. 

READ: What impact will the new Swiss-German tax treaty have on cross-border workers? 


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Reader question: Can I put my Swiss health insurance on hold if I’m abroad?

Given how expensive health insurance premiums are in Switzerland, you may be tempted to suspend your policy while you are abroad. Is this possible?

Reader question: Can I put my Swiss health insurance on hold if I'm abroad?

Unlike the obligatory car insurance, which you can suspend temporarily by depositing your registration plates at the local motor vehicles office, rules pertaining to health insurance are much stricter.

As the Federal Office of Public Health explains it, “If you leave the country for a certain period to travel or study but do not take up residence abroad, you are still required to have [health] insurance in Switzerland”.

In other words, as long as you are a registered resident of Switzerland, regardless of your nationality or passport, you must keep your compulsory Swiss health insurance and pay your premiums. While you do this, you also remain covered against most medical emergencies while you travel.

However, rules are less stringent for supplemental health plans which can, in some cases, be put on hold, depending on the insurance provider, according to Switzerland’s Moneyland consumer website.

The only exception allowed for suspending the health insurance coverage is during a military or civil protection service which lasts more than 60 consecutive days.

“During these periods, the risks of illness and accident are covered by military insurance. Your health insurance provider will refund your premiums”, according to FOPH.

Under what circumstances can you cancel your Swiss health insurance?

Swiss law says you can cancel your insurance if you are moving abroad, either permanently for for a period exceeding three months.

If you do so, only claims for treatments given while you still lived in Switzerland will be paid by your insurance; any medical bills for treatment incurred after you officially leave will be denied.

These are the procedures for cancelling your compulsory health insurance if you leave the country under conditions mentioned above

To announce your departure abroad, you must send your insurance carrier a letter including your name, customer number or AVS/AHV number.

You must also include a certificate from your place of residence in Switzerland confirming that you have de-registered from your current address, as well as the date of your departure.

Note, however, that if your new destination is another Swiss community / canton, rather than a foreign country, your insurance can only be cancelled from the following calendar year and only if you present proof of having taken up a new policy with another company.

READ MORE: EXPLAINED: How to register your address in Switzerland

You can find out more information about this process here

If you suspend your health insurance for less than six years, you can reactivate it at a later date with the same company when you return to Switzerland.

READ MORE : What you should know about your Swiss health insurance before you go abroad