Individual - Significant developments

Last reviewed - 30 January 2023

The State Secretary for International Finance has negotiated special agreements with Germany and Italy regarding the tax consequences for cross-border commuters during the period affected by COVID-19. These agreements were in place until the end of June 2022. In connection with the special agreement with France, the cross-border agreement was in place until December 31, 2022. Also, cantonal tax authorities are considering how they will allocate employment income for the period during which employees could not work, where they usually would have. Employees should therefore review their individual situation for 2022. It is strongly recommended to review one's own tax position for 2022 to tackle any double taxation issues as early as possible.

Furthermore, special agreements have been made between Switzerland and certain countries regarding social security application due to COVID-19, extension until June 30, 2023.

As from January 1, 2023, the cross-border agreement between France and Switzerland would authorize the cross-borders to work up to 40% from home (i.e. from France). There is a sustainable tax regime for all other cantons without the cross-border agreement: per year 40% of the working time can be performed from home without having an impact on the state of taxation of the employment income. The concerned employees should nevertheless check the position on a social security level after June 30, 2023. The revised expatriate ordinance, applicable since January 2016, applies tax benefits more restrictively. Per the new definition, only executives and specialists temporarily transferred or assigned to Switzerland will qualify. The absolute limitation is still five years. With the new law, the deduction for double housing is only available if the dwelling in the home country is not rented out and therefore available to the expatriate. The tax administration is strongly focusing on cases of career expatriates, and such assignments that, after five years, are extended. For these cases, strong evidence of the initial need of a limited stay in Switzerland is required.

The State Secretariat for Economy Affairs has issued a directive regarding intra-group staff lending and stated again that staff lending from abroad into Switzerland is generally forbidden and only very restrictively allowed within a group of companies. It is recommended to seek advice before a work permit is applied for an individual seconded to Switzerland.

On 1 January 2022, the double taxation agreement (DTA) between Switzerland and Brazil has become effective.