CONVINUS Global Mobility Alert - Week 15.2025

BEST PRACTICEImmigration

BEST PRACTICEImmigration SolutionThere is no need for action regarding the home office work in Germany. The main place of work isZurich, Switzerland. Since the employee does not have a residence in Switzerland, this is a classiccase of a cross-border commuter. Therefore, before starting work, it is necessary to apply for across-border commuter permit (G permit) with the Zurich Migration Office. The application must besubmitted by the employer in Switzerland.If the employee works at multiple locations within Switzerland, additional declarations of consentmust be obtained from the respective cantons or employers to ensure the validity of the permit.The employee is also scheduled to have short-term assignments in France. Since he does not residein France but works there occasionally, these workdays must be reported in France under thePosted Worker Notification requirement. France enforces these reporting requirements verystrictly.Tax SolutionIn a cross-border context, determining the tax residency of the employee is crucial. Typically, taxresidency is established in the country where the employee has their residence or habitual abode,or where their center of life interests lies.In our example, the employee resides and habitually stays in Germany. Therefore, he is considered aGerman tax resident and is subject to unlimited taxation in Germany on his worldwide income.The employer is based in Switzerland, where the employment is carried out under a standardemployment contract. From Switzerland's perspective, the employee is subject to limited taxliability because he does not reside in Switzerland.Under the double taxation agreement (DTA) between Switzerland and Germany, there is a specialrule for taxing cross-border commuters, which applies in this case.According to the so-called cross-border commuter taxation rules:If the employee returns to their country of residence on more than 240 days per year (i.e., amaximum of 60 non-return workdays), they qualify as a "true cross-border commuter." In thiscase, Switzerland levies a flat 4.5% withholding tax on gross income.6convinus.com

BEST PRACTICEIf the employee exceeds 60 non-return workdays per year, they are considered a "non-true crossbordercommuter." Then, regular Swiss withholding tax applies to the workdays spent inSwitzerland.Additionally, the employee must file an income tax return in Germany and declare the income there.For true cross-border commuters, Germany retains the taxation rights over the income.In principle, Germany has the taxation right over the workdays in France, provided those days arenot taxed in France. The applicable double taxation agreement between Germany and France andits 183-day rule are decisive. If the employee does not stay in France for more than 183 days in acalendar year, does not receive remuneration from France, and if the costs of the work are notborne by a French permanent establishment, there is no tax liability in France.Social Security SolutionBoth in social security and tax law, the country-of-employment principle generally applies. Thismeans that employment income is usually subject to contributions in the country where the work isperformed. In our example, the employee works in Germany, Switzerland, and France.The introduction of the Agreement on the Free Movement of Persons aimed to prevent a personfrom being subject to social security obligations in multiple countries and to ensure thatcontributions are only due in one country.Therefore, assessing the applicable social security legislation under EU Regulation (EC) No. 883/2004is essential. If at least 25% of the work is carried out in the country of residence (here: Germany),e.g., through home office or other local work, then social security contributions are due in thatcountry.In this case, the employer must register in Germany and pay social security contributions on theentire income there. The employee would then be exempt from social security obligations in bothSwitzerland and France.It is advisable to examine the exact distribution of working hours between countries at an earlystage to determine the applicable social security legislation clearly. Additionally, an A1 certificatemust be obtained for all activities performed in other countries.7convinus.com