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Global Mobility Insights - Frühling / Spring 2024 Processing a tax equalisation is admini-stratively complex for payroll accounting and not always easy, but can be handled well with a well-structured process. Social security As a rule, you want the employee to be insured under the Swiss social security system for a posting of two years, provided this is legally possible. The insurance cover or scope of insurance is also a key point for most employees when negotiating an assignment. There is a social security agreement between Switzerland and Brazil, although this only covers AHV/IV. The existence of the social security agreement helps to ensure that every employee - regardless of nationality - can continue to be insured in Switzerland for an assignment to Brazil, provided that they were subject to the Swiss social security system for at least one month prior to the assignment in Brazil. In order to continue Swiss social insurance for the period of the assignment, the employee must maintain their Swiss health insurance. This is one of the key conditions. In Switzerland, the employee can then remain insured in all branches of insurance (AHV/IV/EO, unemployment insurance, pension fund, accident insurance, daily sickness benefits insurance and health insurance). However, the social security agreement does not cover all branches of insurance. This means that the employee cannot be exempted from compulsory insurance in Brazil for the branches of insurance that are not covered. It now depends on which additional contributions have to be paid in Brazil in accordance with Brazilian social security law. These costs are often borne by the employer, as these contributions would otherwise have to be paid in addition to the existing Swiss social security contributions. However, the assumption of the employer's contributions represents a salary component under tax and social security law, which must also be extrapolated. From an administrative point of view and as confirmation of Swiss social security coverage, a certificate of coverage (CoC) must be applied for via the ALPS platform. The certificate received must then also be submitted to the employee and the Brazilian company of assignment. 36 convinus.com
Global Mobility Insights - Frühling / Spring 2024 Payroll Due to the fact that the employee remains subject to social security in Switzerland during the assignment abroad, but becomes liable for tax in Brazil, payroll accounting must be kept in both Switzerland and Brazil. If you do not wish to make a salary payment in both countries, the payroll accounting of the country in which no salary payment is made becomes the so-called "shadow payroll accounting". However, this does not primarily play a role in setting up and maintaining payroll accounting, as the entire remuneration must be recognised in both countries and then assessed from a social security law perspective in Switzerland and from a tax and social security law perspective in Brazil. Good co-operation and an understanding of the basic principles of the other country's payroll accounting is important for this. Experience has shown that this is a very time-consuming process until it is properly organised. Conclusion It is important to look at each assignment individually and to analyse the individual aspects and details of the assignment in detail. Even if one secondment "superficially" looks the same as another, this does not always mean that the result is the same. It should also be noted here, and especially in advance, that "unfortunately the devil is often hidden in the details". Contact: CONVINUS global mobility solutions Talstrasse 70 +41 (0) 44 250 20 20 CH-8001 Zürich info@convinus.com Switzerland convinus.com convinus.com 37
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