Swiss frontier workers and remote working in Germany, France and Italy: the tax implications
The global COVID-19 pandemic accelerated existing trends in remote work, e-commerce, and automation. As working from home seems not to cause any loss of productivity, the number of people working remotely in Switzerland has dramatically increased.
A lot of companies have already adopted hybrid models of work, which allow them to reduce the overall space they need and bring fewer workers into offices every day. Remote work has also reduced business travelling, as the extensive use of videoconferencing during the pandemic has enhanced the acceptance of virtual meetings everywhere.
In those situations where employees are no longer requested to work 100% on-site at their Swiss offices, tax law, labour law and social security issues arise for a great number of cross-border commuter workers who are resident in a foreign border zone and are gainfully employed within the neighbouring border zones of Switzerland.
During the pandemic period, on 3 April 2020, the OECD Secretariat issued some guidelines on the application of international tax treaty rules in exceptional circumstances, where cross-border workers or individuals suffered from the unprecedented measures imposed by governments, including travel restrictions.
However, the actions exceptionally and provisionally taken by governments, due to the covid-19 emergency, have come to an end. The new widespread forms of remote working and the place where the employee is located might displace existing taxing rights and create new or different tax obligations over the employee's income in other jurisdictions.
Here you can find an overview of how working from home might affect frontier workers employed in Switzerland and resident in Germany, France and Italy.