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CONVINUS Global Mobility Insights NEWSLETTER Frühling / Spring 2023

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Global Mobility Insights - Frühling / Spring 2023 In case of simultaneous self-employment and employment In principle, the social security law of the country in which an employment activity is carried out applies. It should be noted that the definitions of self-employment and employment may differ from country to country. This distinction is particularly relevant in the case of board members and managing directors, as in Switzerland they are considered to be employees, whereas abroad, for example in Germany, they may be classified as self-employed. Example: The managing director for a German company, who is considered self-employed, also takes on a board of directors’ mandate in Switzerland. In Germany, the EU citizen was able to be largely exempted from the German social security insurances due to his managing director activity classified as self-employed, so that he did not have to pay any contributions. Since the Swiss board of directors’ mandate is classified as "employment", the managing director is now subject to Swiss social security contributions on his German AND Swiss earned income. His contribution burdens are expected to increase significantly. CONCLUSION: No two cases are the same. Managing directors working across borders in Germany and Switzerland have individual needs and requirements that must be taken into consideration when finding a solution. There is no blanket answer to the tax and social security challenges faced by managing directors in this situation. To find the best solution, the tax and social security issues must be considered separately and then reassembled into a holistic picture. This is the only way to develop legally compliant and cost-efficient solutions. We will be happy to support you in finding the most suitable solution for your specific concerns regarding the tax and social security challenges in the employment of managing directors in the relationship between Switzerland and Germany. 38

Global Mobility Insights - Frühling / Spring 2023 Is there a difference between cross-border and international weekly commuters? commuters Author: Friederike V. Ruch, CONVINUS (Switzerland) In daily practice, it is not always easy to distinguish between a cross-border commuter and an international weekly commuter. It helps to look at the individual legal aspects in this regard. Definitions A cross-border commuter is a person who is employed and works in a country other than the country of residence and who, in principle, commutes daily between the place of residence and the place of work. An international weekly commuter, on the other hand, is a person who is employed and works in another country and returns to his/her main place of residence at least once a week. Due to the fact that this person stays in the "country of employment" during the week, he or she usually establishes a second residence in this country. The main residence remains in the original state. Cross-border commuters International weekly commuters 1. Residence 1. Recidence Home office activities Work activities at 1st residence Daily 1x per week Place of work Place of work 2. Residence 39

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