CONVINUS Global Mobility Alert - Week 44.2025

BEST PRACTICEIn addition

BEST PRACTICEIn addition to his base salary, he receives the following payments:A daily allowance representing the difference between the Spanish and comparable SwisssalariesMeal allowanceReimbursement of travel expenses within SwitzerlandReimbursement of travel expenses from Barcelona to Basel at the beginning of the assignmentand back at the end of the assignment, as well as once a month for round-trip flight expensesHotel costsMobility allowanceDue to the fact that the assignment takes place at the client’s premises, the first step indetermining tax liability is to establish José Garcia's tax residence. As he is not giving up hisresidence in Spain, his tax residence is in Spain.To determine in which country his earned income is taxed, the double taxation agreement betweenSwitzerland and Spain and, in particular, the 183-day rule must be examined.The result of the examination will be that José Garcia has spent less than 183 days in Switzerlandand is therefore not liable for tax in Switzerland.In addition, the assignment takes place at the client’s premises, so his employer is not obliged todeduct withholding tax in Switzerland. This means that his earned income continues to be taxablein Spain.José Garcia remains subject to social security contributions in Spain and can be exempted fromSwiss social security obligations in all insurance branches.This results in the following payroll setup:Maintaining a payroll in Spain for salary payments, social security contributions, and taxes.To illustrate the different assessment options, here is a second example, this time with thedifference that the assignment took place at the Managio subsidiary in Basel instead of at thecleint’s premises in Basel.8convinus.com

BEST PRACTICEProject assignment for a period of 5 months at a subsidiaryJosé Garcia (Spanish national) was assigned to Switzerland by his employer, the Spanish consultingfirm Managio S.A., headquartered in Barcelona, for a 5-month project assignment from May 1, 2025,to September 30, 2025. The aim of his stay was to optimize the HR and payroll processes at thesubsidiary from Managio based in Basel and adapt them to a new company-wide HR informationsystem used by the globally active consulting firm Managio.José Garcia did not give up his apartment in Barcelona during his assignment in Basel. During hisassignment in Basel, he flies back to Barcelona every month for a weekend.In addition to his base salary, he receives:A daily allowance, which represents the difference between the Spanish and comparable SwisssalariesA meal allowanceReimbursement of travel expenses within SwitzerlandReimbursement of travel expenses from Barcelona to Basel at the beginning of the assignmentand back at the end of the assignment, as well as once a month for round-trip flight expenses.Hotel costsMobility allowanceThe costs are passed on to the Swiss subsidiary.Tax residency remains in Spain, but income tax is payable in Switzerland. This is due to the fact thatthe costs are charged to the Swiss subsidiary. In addition, this situation means that the Swisssubsidiary is responsible for paying Swiss withholding tax.Social security contributions remain payable in Spain, and José Garcia is exempt from socialsecurity contributions in Switzerland for all insurance branches.The payroll setup in this example would be:Spain: Maintaining a payroll for salary payments and paying Spanish social securitycontributionsSwitzerland: Maintaining a shadow payroll for the payment of Swiss withholding tax9convinus.com