Switzerland: Update on special arrangements for cross-border workers (COVID-19)

Switzerland concluded special agreements with France, Germany, Italy and Liechtenstein on the taxation of international workers

Special arrangements for cross-border workers

Switzerland concluded special agreements with France, Germany, Italy and Liechtenstein on the taxation of international workers, with a special focus on cross-border commuters who used their home office as their physical place of work. These special agreements provided continuity in the way international employees are taxed, despite the circumstances of the coronavirus (COVID-19) pandemic.

  • Due to the ongoing COVID-19 pandemic, the agreement with France—enabling French cross-border workers with Swiss employers across all cantons to continue working from home, while applying the tax regime as if they were still commuting to their usual place of work—was formally extended until 31 October 2022. Read TaxNewsFlash
  • Italy and Switzerland released a joint statement agreeing that the rules described in the original consultation agreement will apply regardless of any COVID-19 restrictions. 
  • The agreement with Germany expired on 30 June 2022.
  • The agreement with Liechtenstein expired on 31 March 2022.
  • No mutual agreement was ever concluded with Austria.

Switzerland also has agreed to continue the flexible application of social security rules for remote workers until 31 December 2022. 

KPMG observation

The European Commission is currently in contact with the OECD for possible coordination of the framework application to taxation of cross-border teleworkers within the European Union and between OECD member states, which currently are incongruent. 

Also, in terms of social security coordination rules, the member states are using the transitional period until the end of 2022 to design and agree on a variation of Regulation (EC) 883/2004 in terms of cross-border teleworkers.

Read a September 2022 report prepared by the KPMG member firm in Switzerland

 

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