Global Employer Services in Tax and Legal blog
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.
The future of remote working: Remote work / Cross border commuters - Extension of flexible Social Security approach until 31 December 2021
Introduction of exemptions from the negative PCR test and quarantine requirement as of June 2021
As per our latest tax blog the general rule is that anyone who has been in a country or area with an increased risk of infection must go into quarantine in Switzerland. However, various groups of people are exempt from the quarantine requirement as well as the obligation to present a negative test result at the Swiss border.
A Proposed Tax Hike Under President Joe Biden?
After passing the $1.9 trillion COVID-19 relief package through Congress, President Biden’s attention has now shifted to his tax legislative agenda. During the election campaign, President Biden proposed that tax revenue should increase by $2.65 trillion over the next decade with 6.5% less after-tax income for the top 1% of taxpayers. The focus was on raising taxes on labour, investment and business income for those earning over $400,000 and an increased payroll tax for the wealthy. With Democrats now controlling the House and Senate, President Biden recently proposed the American Jobs Plan and the American Families Plan which target investments in children, families and the economic future of the USA. The full revenue proposals released by the Department of the Treasury can be found at: General Explanations of the Administration's Fiscal Year 2022 Revenue Proposals (treasury.gov). President Biden would need to fund these proposals, so what financial impact could this have on U.S. individuals, employers and businesses?
Provisional COVID Cross-Border Tax Agreement with Germany: Update
On 27 April, the Swiss government announced that the Provisional Agreement of 11 June 2020 between Switzerland and Germany regarding the taxation of cross-border employees during the COVID-19 pandemic has been further extended until at least 30 June 2021. Additionally, the agreement states that working from home because of the pandemic does not automatically imply the creation of a permanent establishment.
The COVID-19 mutual agreement between Switzerland and France for cross-border commuters has been extended
On 10th March 2021, the French and Swiss governments announced that the terms of this agreement have been further extended until 30th June.
In May 2020 the French and Swiss governments issued details of a provisional mutual agreement concerning cross-border workers who would otherwise have lost their cross-border tax status due to government-imposed travel restrictions. Both countries agreed to apply the same tax treatment to cross-border workers as if they had physically crossed the border to go to their usual place of work.
New test and quarantine reduction strategy: requirement for a negative PCR test as of 8 February 2021
On 27 January 2021 the Federal Council took a range of decisions to further contain and overcome the coronavirus pandemic. As of 8 February 2021, a new test and quarantine reduction strategy will be in place and traveller contact data will be collected more comprehensively.
U.S. Expatriation – would you be considered a “covered expatriate” and subject to the punitive exit tax?
The U.S. imposes tax on worldwide income without taking into consideration where its citizens or Greencard holders (GCH) reside. Recent data indicates that many dual citizens and GCHs living outside the US are expatriating in significant numbers to alleviate themselves of their annual U.S. tax burden. The U.S. Federal Register showed that 5,816 renunciations were recorded in the first six months of 2020, a significant increase from 2019. Given the current high level of uncertainty and far-reaching consequences of COVID-19 on world economies, now could be the ideal time to expatriate in considering if your net worth exceeds the $2 million threshold. The main question for most contemplating expatriation is what are the tax consequences?
Updated OECD guidance on the tax treaty implications of the COVID-19 pandemic
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.