COVID-19 in Tax and Legal blog
- Select a blog category
The future of remote working: Remote work / Cross border commuters - Extension of flexible Social Security approach until 31 December 2021, expansion to all European Economic Area countries and Switzerland
The Swiss social security administration has communicated that the current “flexible approach” in regards to maintaining ordinary cross-border commuters (who have been having to work from home) in the Swiss social security and pension system will continue to be valid until the 31 December 2021. Further, the social security authorities of the European Economic Area confirmed the expansion of this approach to all the EEA countries and Switzerland.
On 21 January 2021 the OECD Secretariat released updated guidance on tax treaties and the impact of the COVID-19 crisis. It considers the interpretation of tax treaty articles on the creation of permanent establishments, the tax residence of companies and individuals, and taxation of income from employment. It revisits and updates earlier guidance published by the OECD Secretariat in April 2020.
On 18 December 2020, the OECD released Guidance on the transfer pricing implications of the COVID-19 pandemic (‘the guidance’). It focuses on how the arm’s length principle and OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (‘OECD Guidelines’) apply to issues that may arise or be exacerbated by the COVID-19 pandemic.
Most organisations have addressed the immediate questions around the mobility and safety of their mobile workforces during the pandemic. But tax and legal leaders have an important role to play, helping them navigate the rapidly changing economic and regulatory environment. In collaboration with Human Resources (HR), they are addressing such pressing issues as immigration and cross-border tax, the implications for employment law and employment tax, and the business and human realities of supporting and retaining employees.
Update on Swiss travel restrictions: New list of high-risk countries as of 14 December 2020.
Updated Quarantine Country list in force as per 14 December 2020. Since 11 May 2020 various steps have been taken to relax restrictions on entry into Switzerland. Entry restrictions at the borders to all Schengen states were lifted on 15 June 2020. Since then, the internal borders between the Schengen states and Switzerland have been re-opened, and there is again full freedom of movement of persons, including all EU/EFTA states and the United Kingdom.
The future of remote working: Remote work/ Cross border commuters - Extension of flexible Social Security approach until 30 June
The Swiss social security administration has communicated that the current “flexible approach” in regards to maintaining ordinary cross-border commuters (who have been having to work from home) in the Swiss social security and pension system will continue to be valid until the 30 June 2021.
The tax agreement between France and Switzerland regarding cross-border workers mentions that employer certification is necessary for cross-border workers to be taxed in their country of employment (Switzerland), despite working from home in France during the COVID-19 crisis.
The COVID-19 pandemic has brought drastic changes to working practices. The Swiss government has encouraged employees to work remotely. It is very likely that – despite the relaxation of restrictions – employees will continue to work from home on a regular basis.
This is not without risks for employers. To mitigate these risks a number of issues need to be considered from an employment law perspective.
The future of remote working: mutual agreement between Switzerland and France for cross-border commuters was extended until 31 December 2020
On 20 July, the French and Swiss governments announced that the tax agreement would end on 31 August.
Based on information from the federal authorities, we have now learned that given the rise of COVID-19 cases both in Switzerland and France, the tax agreement is extended intil 31 December this year.
As corporate global mobility teams respond to the myriad of challenges of COVID-19, many are considering a completely new approach and exploring the concept of virtual assignments.