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The Swiss Government has just announced that as of 01 January 2023, new rules will come into force regarding the tax impact for remote workers, despite expected delays in ratifying the agreement.

Before the recent Covid Pandemic, the tax impact of working from home was not really considered as most people travelled to work daily from neighbouring countries commuting into Switzerland. The total number of workers crossing the border each day reached a record 325,000 this past year – of which, nearly 80 000 workers came from France and from the neighbouring canton of Vaud travel to the canton of Geneva every day.

The need to work from home during Covid has now morphed into a social trend, where people actually prefer to work from home and this became a key factor for determining where tax is paid. Discussions between various Governments on this subject have been ongoing since the middle of 2022.

Finally, this Swiss Government has announced this week, that after two years of negotiating, France and Switzerland have reached an agreement on the tax treatment of workers employed in one country who work remotely in the other.

The deal will be implemented immediately from 1 Jan 2023 subject to official ratification by mid 2023 in both French and Swiss parliaments.

Here are the key parameters of the new agreement:

  • From 01 January 2023, up to 40% of an employee’s annual working hours can be worked from home without having any impact on how they are taxed.
  • This means that cross-border commuters, who typically live in France and work in Switzerland, will continue to be taxed in Switzerland. (Switzerland is then required to pay a portion of the tax collected to France).
  • The deal updates two earlier agreements:
    • one signed in 1966 between France and Switzerland eliminating double taxation.
    • a second signed in 1983 between France and the cantons of Bern, Solothurn, Basel-Stadt, Basel-Landschaft, Vaud, Valais, Neuchâtel and Jura requiring tax be paid in the place of employment.

The latest agreement clearly allocates taxation for workers and companies where work is performed from home in France up to a 40% maximum, thereby negating the need for the worker to travel daily across the border to Switzerland.

Accurity GmbH is a professional employer organisation (PEO) based in Zurich. 

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