Switzerland has agreed with France that cross-border workers should be taxed as normal despite being unable to physically go to work. Similar deals with other neighbouring countries are expected to be inked soon.
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Some 330,000 people work in Switzerland while living in neighbouring countries – a number that has increased by just under 40,000 in the last five years. Some 55% of these cross-border workers live in France.
The State Secretariat for International Finance (SIF) said that it recognizes that border restrictions, plus other lockdown measures, have made it impossible for some cross-border workers to enter Switzerland in recent weeks.
On paper, this could compromise long-standing arrangements about which country taxes such individuals and that protect people from being taxed twice – in both their country of residence and work.
On Thursday, Switzerland announced that it had entered into a preliminary agreement with France to allow existing tax agreements to stand despite workers being unable to cross borders. So cross-border commuters who have been forced to work from home will be taxed as if they are able to physically go to their normal place of work.
The mutual understanding has been backdated to March 14 and will last until the end of this month – after which it could be extended. SIF says the French deal, which covers 180,000 workers, is expected to be replicated with other neighbouring countries.
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