HR and Global mobility update

Taxes

Mandatory annual reporting to France: new guidelines for Swiss companies

From 2025, companies will have to report detailed information on employees resident in France to the cantonal tax authorities. An exception is made for Swiss nationals resident in France who are employed by a public institution in France under the 1983 Agreement on cross-border commuters. The requirements are set out in the supplementary agreement to the double taxation agreement between Switzerland and France. The declaration concerns in particular the percentage of teleworking executed, whether or not it is granted contractually. Please note that the maximum telework percentage is 40% and includes a maximum of 10 travel days outside Switzerland. Companies should prepare for accurate data collection in order to enter the percentage in the payroll system and therefore be able to communicate those to the relevant authority.

The draft law provides that employees can ask their former employer for a detailed assessment, including information such as the period taken into account, the percentage of teleworking, days spent travelling on business in France and third countries and days not spent in Switzerland (for frontier workers under the 1983 agreement).

Payroll software producers have no guidelines on how to provide this information. New employers need this information to determine the extent of telework for the calendar year in question.

Reporting to France discloses now facts that were not previously available and may impact the individual tax position of cross-boarder commuters.

Social security

A1 certificate for cross-border commuters teleworking abroad

The deadline for applying for retroactive A1 certificates is approaching for all Swiss employers with employees who telework across borders.

The framework agreement on the EU social security scheme for ordinary cross-border teleworking entered into force on 1 July 2023. This means that cross-border workers who work for a Swiss employer and telework up to 49.9% of their working hours from Germany, Austria, France, Italy (from 1 January 2024) or Liechtenstein can continue to be insured in Switzerland, provided that both countries have signed the agreement. Similarly, cross-border commuters who live in Switzerland and perform less than 50% of their work for employers in Germany, Austria, France, Italy or Liechtenstein in the telework model can continue to be subject to the social insurance of their employer's location.

In general, the application should be submitted within three months of the start of cross-border teleworking. However, a one-off exception has been granted for a transitional period ending on 30 June 2024. During this period, applications can be submitted for a past period of up to 12 months.

Swiss employers must apply for A1 certificates for cross-border teleworkers via ALPS in the category ‘Cross-border telework’. If you need assistance, please do not hesitate to contact us.

Payroll

Adaptation of Swissdec standard ELM 5.0 and publication of ELM 5.3 for automatic data exchange with Italy for employers in Switzerland

On 14 March, the Federal Tax Administration (FTA) announced that the Swissdec ELM 5.0 standard had been adapted to meet the requirements of the tax authorities in order to redefine the data exchange with Italy. These adaptations mainly affect employers in the cantons of Graubünden, Ticino and Valais.

The responsible cantons will inform employers of the employees who must be declared to Italy for the annual report. In principle, all employees resident in Italy are affected, with the exception of the "old genuine frontier workers" under the 1974 agreement. Companies must identify the employees concerned in their payroll system. The first annual declaration for these individuals will be made in early 2025 for the year 2024. Employers with ELM 5.0 payroll software can submit the declaration electronically to the competent authorities.

An important question is: Do the cantonal authorities really know who qualifies as a "genuine old frontier worker"? Normally, yes. However, as of 1 January 2024, employers have to ensure that their cross-border commuters have a maximum of 45 work-related days of absence per year in accordance with the agreement between Switzerland and Italy on cross-border commuters, or that teleworking does not account for more than 25% of their work. Otherwise, they will be given the status of "non-genuine cross-border commuters". Therefore, the non-genuine old cross-border commuters must also be declared to Italy for the year in question.

Immigration

New online platform for work permit applications in the canton of Zurich: What will change for foreign service providers from EU/EFTA countries?

From the end of January 2024, all applications for work permits in the Canton of Zurich must be submitted via the cantonal platform ZHservices.

For foreign companies that send employees to Switzerland to provide services, work permits must now be applied for by a representative based in Switzerland such as Forvis Mazars.