Remote work of border workers: an agreement reached between Switzerland and France

The two states have been negotiating for several months. Switzerland and France have reached an agreement to introduce remote work for cross-border workers after months of negotiations and involve more than 200,000 people, Swiss authorities said on Thursday.

“From January 1, 2023, remote work will be possible up to 40% of working time per year, without calling into question the state of taxation of income from paid activities, in particular for border personnel,” the Secretariat of the State Administration for International Cooperation said. Financial Questions (SFI), which highlights that teleworking during the health crisis represents “a change that will last.”

Subject to the limit of 40% of working hours, working from home will not call into question either the status of a cross-border worker or the rules for taxing the residency of income received, SFI clarifies in a press release.

In the third quarter of 2022, there were more than 208,500 cross-border workers living in France registered in Switzerland, according to data published on the website of the Federal Statistical Office (OFS). They make up just over half of the entire cross-border workforce (55.7%).

In the midst of the Covid-19 pandemic, Bern and Paris signed a settlement agreement on 13 May 2020 to ensure that health measures to combat the disease, such as remote work, do not change the tax regime for cross-border workers. This agreement was extended several times, but Paris and Bern were looking for a long-term solution.

“Balanced result”

For SFI, the agreed solution is a “balanced result reflecting the budgetary interests” of the two states, communities and respective cantons: Bern, Solothurn, Basel-City, Basel-countryside, Vaud, Valais, Neuchâtel and Jura.

An agreement has also been reached for other workers who are subject to the double tax treaty between Switzerland and France. It provides for the retention of taxation in the state where the employer is located, if remote work carried out from the country of residence does not exceed 40% of working time.

This part of the agreement concerns, in particular, Geneva, where there are many border workers and they play a crucial role, especially in health care structures. However, for the state of residence of the worker, “adequate” compensation is provided.

The agreement will be amended by an annex that has yet to be signed and then ratified by the two countries. Meanwhile, the two countries will apply it under a settlement agreement effective January 1, 2023.