Tax on Telework: New Regulations for Cross-border Commuters

Tax on Telework: New Regulations for Cross-border Commuters

Fri, Mar 1st 2024

Responding to the surge in teleworking, Switzerland sets legal groundwork for taxing cross-border commuters’ home-based work. A strategic move to safeguard tax revenues.

Tax on Telework

The federal government is responding to the home office boom. Parliament can decide on the basis for taxing the wages of cross-border commuters for work carried out in their country of residence. The Federal Council adopted the regulation on this on Friday.

Covid-19 and digitalisation are seen as the causes of the trend towards working from home. The Federal Council wants to ensure that Switzerland loses as little tax revenue as possible when cross-border commuters work at home instead of in a Swiss company. As a rule, income is taxed in the country where work is carried out.

If cross-border commuters switch to working from home, their income would therefore be taxed in the country in which they live. The provisions on the taxation of telework in the area of withholding tax are now intended to create an internal legal basis for the taxation of telework that is carried out in a neighbouring country for a Swiss employer.

Switzerland has concluded corresponding agreements with France and Italy. Cross-border commuters from France may work up to 40% of their workload at home. For cross-border commuters from Italy, the upper limit is 25 percent of working hours.

According to the Federal Tax Administration (FTA), around 400,000 cross-border commuters from neighbouring countries work in Switzerland. 220,000 of them live in France and a further 90,000 in Italy.


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