zsis) - Center for Swiss and International Tax Law

The home office has long since become a normal form of work. It enables greater flexibility and thus a better life-work balance, which is why many employees no longer want to do without it. In addition, the home office can also be advantageous for companies: In particular, office space can be reduced, thereby saving on rental costs and energy costs, and employee motivation can be kept high.

Sarah Bühler, René Matteotti and Peter Vogt address the taxation of international employees and their home office activities. They provide an overview of the existing regulations and pay particular attention to the cross-border commuter agreements with Switzerland's neighboring countries.

The world of work has changed drastically in the wake of COVID-19. We are talking about the era of "New Work". Many employees now regularly work in a home office at their place of residence in Switzerland, but also at locations worldwide. This article focuses on the question of whether an employee's home office can become a permanent establishment of the company for tax purposes and which aspects need to be considered. Swiss tax law practice has recently been partly controversial and unclear in this regard.

Working from home has become much more important due to the Corona pandemic. Many employers have found that working from home has proven successful and have introduced regulations that enable mobile working. This also affects cross-border commuters between Germany and Switzerland. A variety of tax regulations, especially in the DTA D-CH, as well as consequences under social security law must be taken into account.

Today, around 85,000 Italian residents work in the border cantons of Ticino, Grisons and Valais. The cross-border commuter agreement concluded with Italy is of great importance especially for the canton of Ticino with its approximately 75,000 cross-border commuters, of which around 66,000 are considered cross-border commuters within the meaning of the agreement.

The double taxation agreement between Switzerland and Liechtenstein contains a special rule for cross-border commuters, according to which the income from employment earned in the State of activity is allocated to the State of residence for taxation. If, on the other hand, an employee in a cross-border context does not meet the criteria established for cross-border commuters, the earned income is allocated for taxation to the State of activity and the State of residence on a pro rata basis in accordance with the general principles. Against this background, employers who employ cross-border commuters from Liechtenstein or Switzerland have different clarification and declaration obligations.

Home office work, which was imposed by the authorities during the pandemic, gave an additional boost to teleworking and the associated flexibilization of work. Even after the pandemic, home office remains widespread in many areas. Employees appreciate the new flexibility and no longer want to do without it. This also applies to the numerous cross-border commuters. The following article clarifies social security issues in connection with home office, especially in cross-border situations.

The place of actual administration is becoming increasingly important in intercantonal relations. If a legal entity moves its statutory seat to another canton, the canton of departure examines the substance available in the canton of arrival. The relevant external objective criteria are office premises, staff and fixed network connection. The business activity, and thus the subjective content of the management as such, are given too little consideration. This problem is to be demonstrated once again on the basis of three recent court decisions.