Switzerland and France seal permanent cross-border telework deal

Swiss and French officials have now agreed that from January 1, 2023, new permanent rules will be in force for cross-border workers who spend part of their time working remotely. © Keystone / Christian Beutler

Switzerland and France have reached a permanent agreement allowing cross-border workers to work part of their hours remotely from home, which affects over 200,000 people.

The Covid-19 pandemic created a sudden need for businesses and employees to start or increase working from home. Since the beginning of the pandemic in 2020, cross-border commuters from France who spent part of their time working from home have benefited from a special temporary tax arrangement under which they paid taxes in Switzerland.

Officials have now agreed that from January 1, 2023, new permanent rules will be in force. A cross-border worker will be able to work remotely for up to 40% of their annual activity without any changes to the employee’s cross-border status or their existing tax arrangements. This concerns mainly cross-border workers employed in cantons Bern, Solothurn, Basel City, Basel Country, Vaud, Valais, Neuchâtel and Jura.

The agreement also covers other workers who are subject to a double taxation agreement between Switzerland and France. It foresees that they will continue to be taxed in the country where the employer is located if telework carried out in their country of residence does not exceed 40% of their work time. This part of the deal concerns Geneva, which employed some 97,000 cross-border workers from France in 2021, many in the health sector.

‘A change set to last”

An estimated 370,000 cross-border workersExternal link are employed at Swiss-based firms but live in France (208,600), Italy (89,700), Germany (63,900) or Austria (8,600).

For cross-border workers, the development of teleworking represents “a change set to last”, the Swiss State Secretariat for International Financial Affairs (SFI) and the French Ministry of Economy and Finance said in a joint statementExternal link on Thursday.

This negotiated solution constitutes a “balanced result reflecting the budgetary interests of the two states, the communities and the cantons concerned”, they declared.

Promises have also been made to “preserve” Geneva’s financial interests. In a statement, the Geneva government welcomed the solution, which it said met the needs and demands of the companies and border staff concerned.

The deal still needs to be officially ratified by Switzerland and France but in the interim period a mutual agreement will apply.

Bern and Paris had signed an initial agreement on May 13, 2020 to guarantee that remote working due to Covid-19 would not modify the tax regime for cross-border workers. This agreement had been renewed several times and extended until the end of 2022.

Meanwhile, an existing temporary agreement between Switzerland and Germany concerning cross-border workers and remote working has been extended until June 30, 2023. However, a similar accord between Switzerland and Italy will not be extended after it expires on January 31, the Federal Tax Administration announcedExternal link on Thursday.