The recent Covid-19 global pandemic acted as a facilitator of change for various business sectors. Working remotely or “teleworking” as it is sometimes referred to, is one example. Working part, or all of the week from home, has now become an established practice throughout Europe.
The EU introduced a work from home scheme during the pandemic, and this has now been extended until 30 June 23 with 100% flexibility granted for where people work from (also applies for work from home abroad). Under this special rule, remote workers can be based 100% in another EU country and still continue to pay Swiss Social premiums, whereas before a limit of 25% of total time was applicable.
But buyer beware! This does not include tax laws, apart from the recent agreement signed between France and Switzerland that is, and where up to 40% of the time worked for a Swiss company can be completed in France by the remote worker, without any liability to pay French tax. After the 40% limit is reached, then a pro-rata system applies.
A brief summary
- The flexible application of the remote working rules has been extended until 30 June 23 under the EU / FMPA and the EFTA agreement and thus also applies to Switzerland.
- A cross-border worker in a home office, will continue to be subject to Swiss social security legislation even if they perform their activity remotely in their country of residence.
- According to this practice, social security jurisdiction thus remains unchanged, regardless of the extent to which the work activity is carried out in the country of residence – as long as it is a member of EU/EFTA.
What other countries have revised remote working opportunities ?
Over 50 countries now offer so called “Digital Nomad Visa’s” which allow international visitor workers, the right to stay in the country offering the digital nomad visa and work remotely via a computer/laptop for a foreign-based employer or business.
- Typically these visas are for 12 months and can be extended for one or more years depending on the country issuing the visa.
- However, digital nomad visas are not for everyone and some remote workers still prefer tourist visas because they are more cost-effective.
- There are several reasons for the growth and expansion of digital nomads, but the most likely one is because host countries target long-term revenue benefits from people working remotely in their country and staying for longer periods of time.
- The Nomad Visa however, should not be confused with the tax situation – which can be complicated:
- Some countries expect the remote worker to pay full tax in their country.
- Others have tax deductions or special rates for digital nomads (which in most cases can also be employees of multinational companies as well as entrepreneurs).
- Some countries even have zero taxes. These assume the remote worker still pays tax in their home country.
- Almost all countries require remote workers to have private health insurance and don’t require social benefit payments.
Some of the countries now offering digital nomad visas in Europe include Portugal, Spain, Croatia, Greece. Click here for a full list of countries offering a digital nomad visa. Although this sounds simple, the process to get a Digital Nomad Visa, can in some cases take much longer than for a regular tourist visa. Proof of income and a private health insurance are key and the devil is in the detail with regards to filling out the application form(s).
Obtaining a digital nomad visa in Europe is targeted to non-EU nationals as EU nationals have free movement and can stay in EU countries for up to 6 months without any tax implications. Any longer than this and they would need to register in the country where they would be working remotely as a permanent resident.
Remote working is now well established in many countries. Introduced during the Covid-19 pandemic as an emergency measure, it has now grown in popularity and acceptance from employees and workers alike. Countries are also seeing remote working as an additional revenue tax income source, as well as an opportunity to invite skilled workers to their county. Under the banner of “digital nomad” – skilled workers are invited to spend longer periods of time in a country if they can prove they are financially self-sufficient. Although Switzerland does not yet belong to the over 51 countries globally offering digital nomad visas, it is still possible to live in, and work from Switzerland for an international company. This assumes EU/EFTA nationality or a valid visa status.
Accurity is SECO licensed with a 20+ year enviable reputation as a trustworthy, reliable and transparent partner for companies of all sizes including SMEs, contractors and recruitment agents. We also work with cross border workers living in France and working in Switzerland – as well as those living in Switzerland and working remotely for foreign companies. Our core services include Employer of Record or EOR for contractors and international and domestic clients wishing to engage contractors. Our pricing system is fair and transparent. We are based in Switzerland and have excellent local knowledge and connections. Contact our team to see how we can help you.