SWI GVT opened a targeted consultation re taxation of teleworking carried out abroad.
Main Points
In 2022, SWI and FR agreed on an addition to the double taxation agreement (DTA).
That cross-border commuters will pay withholding tax on their entire earned income in SWI from Jan. 1, 2023, if they do not work more than 40% of the time from home.
The additional agreement has been planned to be definitively signed on Jun. 30, 2023.
Swiss tax law revision adopts the principle of that additional agreement into Swiss law.
Effectiveness
Selected bodies must submit their comments until Oct. 2, 2023.
In Mar. 2024, SWI Tax updated on taxing telework of crossborder commuter #191239.
Mar. 2024 Additional Agreement Approved
On Mar. 13, 2024, SWI PRL approved the telework taxation for French cross-border commuters who are allowed to work from home for up to 40% of their working hours.
The country where the employer is located must transfer to the residence country of the employee 40% of taxes levied on telework remuneration in the residence country.
An automatic exchange of information about wage data is being planned; a special reg applies to the canton of Geneva, where many French cross-border commuters work.
The additional agreement updates further provisions of the DTA with France and it will be updated with the OECD's guide for combating base erosion, profit shifting (BEPS).
The proposal goes to the Council of States.
Apr. 2024 National Council Approves Law
On Apr. 15, 2024, SWI PRL approved law on the taxation of cross-border telework.
There are international treaty regulations for working from home abroad, and the law forms basis of national tax law, such as double tax agreements with France and Italy.
According to the study, cross-border commuters in France can work up to 40 percent of their time at home, and 25 percent in Italy, and income is taxed in country of work.
In a vote of 183 to 0, SWI PRL National Council said yes, and the bill goes to Council of States, and although the majority ruled in favor of regulation they did not lay specifics.
May 2024 Council of States Approvals
On May 30, 2024, SWI PRL said Council of States approved the supplementary agreement to the double taxation agreement with 38 votes to 0 and no abstentions.
Later the same day, the Council of States approved new federal law on cross-border homeworking with 40 votes to 0 and no abstentions; matter is ready for the final vote.
Creates domestic legal basis for interstate regulations, re neighbouring countries only.
Jun. 2024 Proposals Finalized
On Jun. 14, 2024, SWI PRL finalized 14 proposals including a supplementary agreement to the double taxation agreement with France, re teleworking taxation.
Concerning cross-border commuters from the neighboring country; and a legal basis for the taxation of the income of cross-border commuters who work from home.
The law merely sets out a framework; international treaties will remain decisive.
Oct. 2024 Federal Act Enacted
On Oct. 16, 2024, SWI GVT said the Federal Council set the entry into force of the Federal Law on the Taxation of Telework in the International Context for Jan. 1, 2025.
It ensures that SWI can tax income from gainful employment carried out by workers in their state of domicile for an employer who has its registered office in Switzerland.
Provided that the right to tax reverts to Switzerland under an international treaty.
The draft exclusively concerned SWI's 5 neighboring states, adopted on Jun. 14, 2024.
SWI Tax said implementing provisions for the Withholding Tax Ordinance will come into force on Jan. 1, 2025, for employment relationships that ended before Dec. 31, 2024.
