vor 6 Monaten

CONVINUS Global Mobility Insights NEWSLETTER Frühling / Spring 2023

  • Text
  • Wwwconvinuscom
  • Newsletter
  • Insights
  • Mobility
  • Global
  • Druckdaten


Global Mobility Insights - Frühling / Spring 2023 requirements can in theory benefit from considerable tax relief due to the lower tax rates in Switzerland, as Germany applies the exemption method (instead of the imputation method). In order for managing directors of Swiss companies living in Germany to benefit from the lower taxation in Switzerland, both the employees and the companies usually work hard to ensure that this group of individuals actually qualifies as executives of Swiss companies within the meaning of the DTA. This includes, among other things, the necessary administrative requirements such as entry in the Swiss commercial register, the correct title in the employment contract, and the change from genuine to non-genuine cross-border commuter status. Residence in Switzerland & Managing Director for a German Company Due to the higher tax burden in Germany, one usually tries to avoid that managing directors who live in Switzerland and work for a German company qualify as executive employees in the sense of the DTA Germany-Switzerland. Instead, the aim is to ensure that they can be taxed as "normal" employees. But beware! - In practice, it has been shown time and again that the German tax authorities are extremely competent when it comes to bringing tax revenues to Germany that should be allocated to Switzerland based on higher-level regulations. One example of this is the so-called "umbrella taxation". In order to partially avoid the higher German tax burden or at least to be aware of it, we recommend a detailed examination of the facts and the associated tax implications. Social Security Obligations for Managing Directors in Relation between Germany and Switzerland Employment in one state only Like "normal" employees, managing directors with EU or EFTA citizenship are only subject to the social security law of their country of activity, provided they only work in one country. Therefore, the actual place of work and not the company's registered office or the law of the employment contract is decisive for the social security status. For the employer, this means that social security contributions must be settled in accordance with the national laws of the place of work. 36

Global Mobility Insights - Frühling / Spring 2023 Example: The managing director of a Swiss company lives in Germany. He works exclusively in Switzerland. He is, therefore, subject to Swiss social security contributions. Employment in several countries Managing directors are also increasingly working in several countries. Between Germany and Switzerland, this often occurs in the context of home office activities. However, since the activity in the foreign home office could have a significant impact on the social security status of the managing director, employers are urged to obtain the information on any activities abroad from the managing director. In case of a "substantial" activity in the country of residence, i.e., an activity of 25% or more in the country of residence, the employee is subject to the social security obligation of the country of residence. For this employee, the social insurances of the country of residence must then be paid in full. Employees who do not work more than 25% in the country of residence are subject to the social security obligation at the employer's headquarters. Example: The managing director of a Swiss company lives in Germany. He works mostly in Switzerland. Due to high travel activity and increased home office days, he works 1-3 days per week in Germany. If the employee works more than 25% on an annual average in his country of residence Germany, he is in general subject to German social security contributions. This leads on the one hand the obligation for the company to pay German social security contributions and on the other hand the loss of pension fund contributions for the employee. Internationally working managing directors should, therefore, be made aware of these special regulations regarding social security contributions in a timely manner. 37

Global Mobility Alert


Copyright © 2002 bis 2020 CONVINUS