Automatic data exchange with Italy and France for employers in Switzerland – adjustment of Swissdec ELM 5.0 standard and publication of ELM 5.3

Annual report to Italy

The FTA announced on 14 March that the Swissdec ELM 5.0 standard had to be adapted. Swissdec had to make changes to the definition for data exchange with Italy at the request of the relevant tax authorities. These provisions apply to employers in the cantons of Graubünden, Ticino and Valais.
The procedure is as follows: The responsible cantons inform the employers which employees must be reported. In principle, these are all employees resident in Italy except genuine cross-border commuters under the old 1974 agreement (old genuine cross-border commuters). Companies must identify the employees concerned in their payroll accounting system. The annual notification for the marked persons will be made for the first time at the beginning of 2025 for 2024. Employers with payroll software with ELM 5.0 can submit this notification to the competent authorities electronically.

Do the cantonal authorities really know who is a genuine cross-border commuter? Normally, yes. However, since 1 January 2024, employers must also check that their cross-border commuters under tax law do not exceed 45 work-related non-return days per year in accordance with the cross-border commuter agreement between Switzerland and Italy or that teleworking does not exceed 25%. This would therefore lead to the status of a non-genuine cross-border commuter. The non-genuine old cross-border commuter would therefore also have to be reported to Italy for the year in question.

For further details, please refer to previously published blogs. You can also book our webinars planned for 2024 in German, in which the basics and cases will be examined in detail.

 

Annual report to France

From the calendar year 2025, companies (with the exception of Swiss nationals domiciled in France employed by a public-law institution under the 1983 cross-border commuter agreement with France) must report detailed information for employees/expats etc. domiciled in France to the cantonal tax authorities. This is stipulated in the supplementary agreement to the double taxation agreement between Switzerland and France, which has yet to be ratified. In particular, this includes the percentage of teleworking. The declaration must be made whether an employer allows teleworking or not. As a reminder, the maximum teleworking rate of 40% covers a maximum of 10 days spent travelling outside Switzerland. The provisions are very complex and companies are well advised to organise themselves in such a way that they collect the data in detail and are thus in a position to enter the percentage in the defined field in the payroll accounting system at the end of the year or when the employee leaves the company.

The draft law also provides for employees to be able to ask their previous employer of the corresponding calendar year to prepare a detailed evaluation with the following information:

  • Period considered in the calendar year
  • Percentage of teleworking in %
  • Business travel days in France
  • Business travel days in third countries
  • Non-return days in Switzerland (for cross-border commuters under the 1983 agreement)

 

The payroll software manufacturers have no specifications as to whether and how they provide this information as standard.

The new employers are dependent on this information in order to determine whether and how much teleworking they can still grant for their employment period in the corresponding calendar year.

The consolidated report to France discloses information that was not previously available.

For further information, please refer to the other blogs on the teleworking agreement between Switzerland and France.

The webinar “Employees resident in France – The challenges with withholding tax and reporting” in English is planned for 6.6.2024 from 12.00 to 14.00.

Link for further details: https://www.zulaufgmbh.ch/en/kurse/employees-resident-in-france-the-challenges-with-withholding-tax-and-reporting/

 

Link to the Swissdec standards (available in German, French and Italian): https://www.swissdec.ch/elm

 

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