Switzerland and France have just concluded a provisional mutual agreement, which settles the question of the taxation of their respective cross-border workers working from home. For the period from March until the end of May, cross-border commuters working from home will be deemed as have if they had physically gone to their usual place of work for tax purposes.
Due to travel restrictions issued by the Swiss and French governments, many cross-border workers who reside in France and work in Switzerland, or vice versa, have been unable to get to their ordinary place of work. Employees and employers alike have been asking the question whether this will result in a possible change in the tax regime applicable to cross-border workers.
Switzerland and France have, therefore, concluded an agreement for cross-border workers who are now forced to work from home, due to the sanitary measures taken by the two governments. The agreement, which applies on an exceptional and provisional basis, clarifies the questions surrounding the application of the tax treaties currently in force. In substance, according to this agreement, cross-border commuters working from home continue to benefit from the same tax treatment as if they had physically gone to their usual place of work.
The provisions of this mutual agreement take effect from 14 March 2020 and apply until and including 31 May 2020. The agreement is tacitly renewable, at the end of each month. It will cease to have effect when the two States have ended travel warnings and restrictions.
The Swiss government is currently in contact with other neighbouring states to conclude similar mutual agreements and further information will be following.
This agreement reflects the recommendations recently made by the OECD and is a pragmatic approach to very relevant questions which should reassure cross-border commuters and contribute to the security of law.
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