Switzerland Announces New Tax Agreements with Italy and France

Switzerland has signed declarations with Italy and France regulating the taxation of home working for cross-border commuters.

  • Italy: From January 1, 2024 all cross-border commuters as defined in the agreement on cross-border commuters signed in December 2020 will be able to work from home for up to 25% of their working hours, without this affecting either the country which is eligible to collect tax on income from salaried employment or the status of cross-border commuters.
    • It was also decided to expand the interim solution agreed to between the two countries on April 20, 2023.
    • By the end of November 2023, the competent authorities of both states will agree on special rules for the taxation of home working for cross-border commuters for the period from February 1, 2023 to December 31, 2023.
  • France: The Swiss Federal Council adopted the dispatch on the approval and implementation of an additional agreement supplementing the double taxation agreement (DTA) with France. The additional agreement regulates in particular the taxation of cross-border remote working of up to 40% of working hours per year.
    • The additional agreement signed with France on June 27, 2023, regulates the taxation of cross-border remote working of up to 40% of annual working hours. Within the limits, the agreement has a provision for remuneration in connection with remote working to be taxed in the contracting state in which the employer is located.
    • The agreement also envisages that the country of the employer will transfer to the employee’s country of residence 40% of the tax which it has levied on the remuneration from remote working in the country of residence. In order to ensure that the new rules are applied, an automatic exchange of salary data is planned.
    • The additional agreement also updates other provisions in the double taxation agreement between Switzerland and France. In particular, it brings the double taxation agreement into line with the results of the OECD’s efforts to combat base erosion and profit shifting.
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