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New tax regime for cross-border remote workers begins in 2025

CF: telecommuting and frontier workers, from January new law
CF: telecommuting and frontier workers, from January new law Keystone-SDA

As of next January 1, 2025, the new Swiss law on taxing telecommuting cross-border workers will come into effect.

The legislation became necessary because of the spread of this practice, driven particularly by the Covid-19 pandemic, and is intended to prevent the erosion of tax revenues for the Swiss federal government. Indeed, conventions to avoid double taxation stipulate that employment is taxed in the state where the work is physically carried out.

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To solve this problem, Switzerland has negotiated agreements with Italy and France, two of its neighbours with the largest number of cross-border commuters. Thanks to these agreements, teleworking by a cross-border worker can continue to be taxed in Switzerland up to a certain limit (in Italy up to 25% of annual working time and in France up to 40%).

Also on January 1, 2025,” the government points out in a note, “the implementing provisions contained in the Federal Department of Finance withholding tax ordinance, which provide legal certainty in the event that the employment relationship between the Swiss employer and the French-domiciled employee ends before December 31, will also come into force.

Adapted from Italian by DeepL/ac

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