28 August 2023

New Employer Obligations: Switzerland-France Supplementary Tax Agreement on Double Taxation

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  • Employment / Immigration

Supplementary agreement regulates home office taxation and employer responsibility.

Switzerland and France signed an additional agreement to the existing double taxation agreement on June 27, 2023, which contains new and permanent rules for income taxation in home office cases. For the purposes of practical implementation, the employer will be faced with some obligations.

The additional agreement allows employees to continue to carry out cross-border home office work up to 40% of the working time per year, whereby the right of taxation for remuneration in connection with home office work within this limit is assigned to the employer state. In return for this right of taxation, the employer's state transfers 40% of the taxes incurred through the home office activity to the state of residence. For the practical implementation of this new rule, an automatic exchange of information on wage data is planned, which provides for far-reaching obligations for the employer.

In the future, employers will have to submit annual reports to the Federal Tax Administration (FTA) containing the following information on an individualised basis:

  • Surname(s) and first name(s) of the person, date of birth, postcode of the place of residence and, if available, further information facilitating the identification of the person (address, place of birth, civil status, tax number);
  • Calendar year in which the income was earned;
  • Number of home office days or home office quota in percent;
  • Total amount of gross remuneration paid out.

The exact date on which the additional agreement will enter into force is still open. However, employers are well advised to already start organising themselves accordingly in view of the entry into force and to have enough time to implement the necessary internal processes for the required documentation purposes, as - in our opinion - an exchange of wage data for the entire 2023 calendar year cannot be ruled out.