Employees as cross-border commuters: Part 1

Tax liability in Switzerland

Due to their geographical location, companies have to deal with the cross-border commuter issue. What to do when your employees cross borders. Get an insight into current tax and social security aspects for cross-border commuters. In this article you will get a general overview of tax liability in Switzerland.

General

With regard to tax liability in Switzerland, there are three main points to consider. The unlimited tax liability in Switzerland, the limited tax liability in Switzerland and finally the tax liability according to the regulations in the double taxation agreements (DTA).

Unlimited tax liability

The unlimited tax liability in Switzerland comes into play in the light of the following aspects.

Intention to remain permanently in Switzerland
stay in Switzerland without interruption of more than 90 days without gainful employment
stay in Switzerland without interruption of more than 30 days with gainful employment.

Limited tax liability

The limited tax liability must be observed if,

a gainful activity is pursued in Switzerland, but the place of residence is abroad
real estate or property is owned, but the gainful activity and the main residence are in a third country.

Double taxation agreement

In the area of double taxation agreements, it is necessary to examine whether it makes sense for a third-country national to be subject to tax in Switzerland (tax liability at the center of life). This can be due to personal, but also economic aspects of interest.

Finally, it can be stated that when hiring a new employee with a cross-border background, the options must be carefully examined. As an employer, it is also important to be able to present the corresponding recommendations for action during the hiring process, so that individual solutions can be worked out for your employees. This will save you additional administrative expenses in the long term.

The most important things at a glance

When hiring an employee with a cross-border commuter background, clarify in good time which options can be recommended.
Check for any tax liability on real estate and property owned in Switzerland, especially if their main residence is in a third country.
Are individual solutions possible for you in connection with the double taxation agreement?

COVID Note

Due to the current situation with the COVID-19 pandemic, there may be exceptions that must be observed.