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CROSS-BORDER WORKERS

Swiss home-working agreement must be extended, demand cross border groups

As the agreements concerning taxes and social security contributions of Swiss cross-border employees who are still working from home are set to expire soon, two groups are asking Switzerland and France to renew the deal.

Swiss home-working agreement must be extended, demand cross border groups
While some cross-border workers commute to their jobs in Switzerland, others still work from home. Photo by SEBASTIEN BOZON / AFP

The European Cross-Border Group (GTE) and a business association of the French-speaking Switzerland (FER) wrote a letter to Swiss President Ignazio Cassis and his French counterpart Emmanuel Macron asking them to renew two transitional agreements concerning taxes and social security of cross-border employees who are still working from home.

The agreements, created during the Covid pandemic when home office obligation was in place, expire on June 30th.

The first agreement relates to social security, stipulating that if a cross-border employee spends more than 25 percent of work hours at home in France, the Swiss employer must pay social insurance contributions to the French authorities on the totality of the salary earned, and not just on the amount corresponding to hours spent working at home.

The second one applies to taxation: if the 25-percent time limit is exceeded, taxes have to be paid not in Switzerland but in France, where the rate of taxation is higher.

In asking the two government to extend the agreement beyond the June 30th deadline, the two groups pointed out “the indisputable advantages” of the home office work.

“A strong will, on both sides of the border, will make it possible to reach a consensus to increase the authorised teleworking time”, GTE said.

As for FER, it wrote to both governments that “it is important that France and Switzerland can reach, in the mutual interest of companies and their employees, a solid and lasting agreement, taking into account the evolution of the [home office] work model”.

READ MORE: EXPLAINED: Who can work in Switzerland but live in a neighbouring country?

Agreement on home work for cross-border workers in Switzerland is an exceptional regime concluded between the two countries during the Covid-19 pandemic, to curb the spread of the virus on both sides of the border.

At the time, Switzerland agreed with neighbouring countries, including France, to suspend certain rules concerning cross-border workers, especially relating to social insurance and taxes. The agreement was renewed several times since then.

Its purpose was to allow cross-border workers in Switzerland to work from their home in neighboring France (at least those whose jobs allow it), while enabling them to remain subject to Swiss social security and  tax system as if they had continued to work entirely in Switzerland.

About 90,000 workers from France are employed in Geneva, but there is no official data on how many still work from home.

Italy and Switzerland signed an agreement relating to cross-border workers in March.

These articles provide more information about cross-border taxation:

Tax rules cross-border workers in Switzerland need to know

EXPLAINED: What cross-border workers should know about taxation in Switzerland

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CROSS-BORDER WORKERS

Switzerland and France further extend tax benefits for cross-border workers

Switzerland has again extended a set of beneficial tax arrangements for cross-border workers living in France until November, although not everyone is happy.

Switzerland and France further extend tax benefits for cross-border workers

The rules were originally put in place during the Covid pandemic, when various laws and regulations in Switzerland and elsewhere encouraged people to work from home. 

Alongside these rules, the Swiss and French governments changed the underlying tax rules to encourage people to work from home. 

These rules were originally put in place in March 2020, but have been extended several times and will now expire on October 31st. 

What are the rules? 

Under normal circumstances, anyone living in France who works in Switzerland can spend no more than 25 percent of their time working from home. 

READ MORE: Why French cross-border workers choose to work in Switzerland

If they exceed this time limit, they would have to pay social security contributions and tax charges tin France rather than in Switzerland, which would be much higher.

The agreements between France and Switzerland – along with several other countries where people resident in France work like Belgium, Luxembourg and Germany – “provide that days worked at home because of the recommendations and health instructions related to the Covid-19 pandemic may … be considered as days worked in the state where [workers] usually carry out their activity and therefore remain taxable,” according to the statement from the French Employment Ministry.

In June, cross-border worker advocates called for the agreements to be extended. 

Companies in France’s Haute-Savoie region, where most of cross-border workers employed in Geneva come from, are upset, claiming that home-office agreement makes working in Switzerland even more attractive for French workers, at the detriment of local businesses.

According to Christophe Coriou, head of the Haute-Savoie section of French employers, “these agreements accentuate the competitive disadvantage” of French companies compared to Swiss jobs — in terms of salaries, but also lower taxes and other perks.

“By emptying them of their human resources, Geneva penalises companies in Haute-Savoie”,  Coriou  said, adding that “teleworking of cross-border workers, which is perceived as an additional attraction to the salary, accentuates the competitive disadvantage of companies in neighbouring France”.

What about other countries? 

Switzerland is heavily reliant on cross-border workers, with an estimated 340,000 crossing daily from France, Germany and Italy into Switzerland to work. 

About 90,000 workers from France are employed in Geneva, but there is no official data on how many still work from home.

Italy and Switzerland signed an agreement relating to cross-border workers in March.

Germany also has its own agreement with Switzerland. 

More information about the rules in place can be found at the following link. 

EXPLAINED: What cross-border workers should know about taxation in Switzerland

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