What cross-border workers in Switzerland need to know about tax change with France
Cross-border commuters currently pay withholding tax in Switzerland on income earned in the country – however that is set to change for some.
Cross-border commuters pay withholding tax in Switzerland on income earned in the country.
Under the current agreement between Bern and Paris, the work carried out from their home may nevertheless be taxed in France.
This concerned mainly cross-border workers employed in cantons Bern, Solothurn, Basel City, Basel Country, Vaud, Valais, Neuchâtel and Jura.
The agreement also covers those workers who are subject to a double taxation agreement between Switzerland and France.
The new agreement means they will only pay tax in Switzerland, provided they don’t work more than 40 percent of their time from home in France. The agreement will be concluded on June 30th, 2023.
This part of the deal concerns Geneva, where some 97,000 cross-border workers based in France are employed.
The initial agreement came about about due to the changing nature of work during the pandemic when many cross-border workers worked from home in France rather than in Switzerland.
An estimated 370,000 cross-border workers are employed at Swiss-based firms but live in France (208,600), Italy (89,700), Germany (63,900) or Austria (8,600).
When it comes to cross-border remote work, Switzerland could face a loss of tax revenue in the medium and long term provided it does not make adjustments either to international (via double taxation and cross-border commuter agreements) or to domestic law (national tax laws).
The proposal adopts the principle of the supplementary agreement into Swiss tax law, so that withholding tax on the earned income of employees living abroad is guaranteed even if they are not physically present in Switzerland.
At its meeting on June 9th, 2023, the Federal Council submitted the revision of the national tax law for consultation and the agreement will be concluded on June 30th, 2023.
READ MORE: What cross-border workers should know about taxation in Switzerland
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Cross-border commuters pay withholding tax in Switzerland on income earned in the country.
Under the current agreement between Bern and Paris, the work carried out from their home may nevertheless be taxed in France.
This concerned mainly cross-border workers employed in cantons Bern, Solothurn, Basel City, Basel Country, Vaud, Valais, Neuchâtel and Jura.
The agreement also covers those workers who are subject to a double taxation agreement between Switzerland and France.
The new agreement means they will only pay tax in Switzerland, provided they don’t work more than 40 percent of their time from home in France. The agreement will be concluded on June 30th, 2023.
This part of the deal concerns Geneva, where some 97,000 cross-border workers based in France are employed.
The initial agreement came about about due to the changing nature of work during the pandemic when many cross-border workers worked from home in France rather than in Switzerland.
An estimated 370,000 cross-border workers are employed at Swiss-based firms but live in France (208,600), Italy (89,700), Germany (63,900) or Austria (8,600).
When it comes to cross-border remote work, Switzerland could face a loss of tax revenue in the medium and long term provided it does not make adjustments either to international (via double taxation and cross-border commuter agreements) or to domestic law (national tax laws).
The proposal adopts the principle of the supplementary agreement into Swiss tax law, so that withholding tax on the earned income of employees living abroad is guaranteed even if they are not physically present in Switzerland.
At its meeting on June 9th, 2023, the Federal Council submitted the revision of the national tax law for consultation and the agreement will be concluded on June 30th, 2023.
READ MORE: What cross-border workers should know about taxation in Switzerland
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