Telework management for cross-border commuters

With the development of teleworking, particularly after the Covid-19 pandemic, the rules governing the management of teleworking have undergone a number of changes. Understanding these rules is essential to ensure legal compliance, both in terms of social security and taxation. This article aims to clarify the rules that apply depending on your employees’ country of residence.
Teleworking and social security.

Germany, Austria, France, Italy, Liechtenstein and other signatories to the multilateral agreement :

On 1 July 2023, a new multilateral agreement came into force for several countries in the European Union (EU) and the European Free Trade Association (EFTA), including our neighbours Germany, Austria, France and Italy. This agreement allows cross-border commuters to telework up to 49.9% of their working time from their country of residence, while remaining affiliated to Swiss social insurance schemes. However, some administrative formalities are required.
Key points of the agreement:

• Period applicable: From 1 July 2023 for most of the countries concerned, and from 1 January 2024 for Italy.
• Percentage of teleworking: Teleworking between 25% and 49.9% of working time enables continued affiliation to the Swiss social security scheme.
• Nationality: The rules apply only to nationals of Switzerland and EU/EFTA countries. Nationals of non-EU/EFTA countries are therefore not eligible.

As an employer in Switzerland, it is your responsibility to monitor the percentage of your employees who telework and, if necessary, to request an A1 certificate to prove that they are covered by the Swiss social security system.

Below is a summary table:

Teleworking taxation
Teleworking also has a direct impact on the taxation of cross-border commuters. Days worked abroad must be taxed in the country of residence if the rate of teleworking exceeds a certain threshold, which varies from country to country.

France:
Since 1 January 2023, frontier workers residing in France have been able to telework up to 40% of their annual working time without this affecting their tax regime. The aim of this permanent agreement is to avoid the tax complications associated with the increasing use of teleworking. For these employees, taxation remains in Switzerland as long as teleworking does not exceed the 40% threshold, i.e. 2 days for a 100% employee. This rule also applies to temporary assignments carried out in France or another country, provided they do not exceed 10 days per year.
It is also important to remember that the Attestation de Résidence Fiscale (ARF) is still compulsory for French cross-border commuters working in the Swiss cantons of Bern (BE), Basel-Landschaft (BL), Basel-City (BS), Jura (JU), Neuchâtel (NE), Solothurn (SO), Vaud (VD) and Valais (VS).
Italy:
The situation is different for Italian cross-border commuters. From 1 January 2024, these employees may telework up to 25% of their working time without any impact on their tax regime.
As long as the percentage of teleworking remains below these thresholds, the employee will only be taxed in Switzerland.

Key points to remember

• Check bilateral agreements: Before authorising teleworking, check the bilateral tax and social security agreements applicable to each of your employees’ countries of residence. Bear in mind that the rate of teleworking set may have consequences for the tax system and/or the payment of social security contributions.
• Administrative management: Use the ALPS platform to request the necessary certificates (such as the A1 certificate, which is compulsory as soon as the rate of teleworking exceeds 25%), and to ensure compliance with social security obligations. This platform is essential for managing multi-activity declarations and possible derogations for teleworking.
• Communication with employees: It is recommended that teleworking arrangements be clarified with each person concerned, taking into account the specificities of their country of residence. A model telework agreement may be useful for formalising these conditions.
• Regularity of work: The alternation between on-site work and telework must be regular and comply with the maximum percentages defined by the agreements in force. Make sure you monitor and update your teleworking indicators for each person concerned, so that you can attest to this if necessary.

In conclusion

Managing teleworking for cross-border employees requires in-depth knowledge of international agreements and constant vigilance to ensure compliance with tax and social security rules. As a Swiss employer, good management of these aspects enables you to protect your business while offering your employees the flexibility they need when teleworking.

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