COVID agreements – Information from the Federal Tax Administration

These explanations must be read in the context of the new publications from SIF, in particular the clarification regarding France of 20.7.2022. I hereby refer to the additional blog.

The Federal Tax Administration published the current status of the pandemic-related mutual agreement on 27.6.2022. Switzerland had concluded special provisions with Germany, France, Italy and Liechtenstein due to the pandemic. Many employees have become accustomed to working from home and do not want to return to work in Switzerland full time. What is the current status and what is to be particularly considered in the context of taxes?

  • Germany:
    From 1.7.2022, the usual provisions apply again. However, companies must take into account that the work-related non-return days will have to be reduced for 2022 due to the measures taken by employers and states. If a genuine cross-border worker exceeds the work-related non-return days (for a whole year >60 days), he/she must be taxed at the full withholding tax rate.
  • Liechtenstein:
    The mutual agreement expired on 31.3.2022. For 2022, it is also necessary to clarify the extent to which the non-return days for occupational reasons must be reduced due to pandemic measures. The wording of the agreement reads as follows (free translation): Therefore, a proportional reduction 45 / 366 of the limit of 45 working days under point 5(c) of the Protocol to the Agreement should therefore be applied to these working days for the remainder of the calendar year. The period during which a worker is affected by measures within the meaning of para. 1 (1) shall be confirmed by the employer in writing with reference to the respective applicable measure. During this period, working days on which the worker does not actually return to the place of residence due to the performance of work shall not be taken into account. If these non-return days are exceeded, withholding taxes must be taken into account for these genuine cross-border commuters (applies to companies in the non-public sector).
  • Italy:
    The Memorandum of Understanding has not currently been terminated. Therefore, the end is not known. However, it is important to note that the special provisions only apply if there are measures taken by the states in connection with combating the spread of COVID-19. Days worked abroad that are not pandemic-related should be eliminated in the withholding tax calculation.
  • France:
    (Reproduction of information from the Swiss Institute of Financial Affairs (SIF) yesterday -27.6.2022 – free translation).
    The mutual agreement is valid if there are measures taken by states in connection with combating the spread of COVID-19 and will remain in force until 30 June 2022 unless it is extended; the competent authorities are currently in discussions on the bilateral formalisation of a possible new mutual agreement from 1 July 2022. The situation with France is currently very unsatisfactory. It is a matter of finding solutions for employers in cantons without a special cross-border commuter agreement and those with a special cross-border commuter agreement and the agreement of the Canton of Geneva with France.
    Addendum of 30.6.2022:
    The authorities informed in the afternoon of 29.6.2022 that the negotiations for a medium and long-term solution regarding teleworking of cross-border workers from France have not yet been concluded. Therefore, Switzerland and France have agreed to put into force a provisional arrangement for cross-border workers with telework from 1.7.2022 until the end of October 2022. Consequently, the rules applicable under normal conditions do not have to be applied for this period. This provision is derived from the Mutual Agreement, which applies to pandemic-related home office work until 30.6.2022. These provisional regulations are available in detail at: (French only)
    The published statement leaves many questions unanswered. Companies that have reverted to the usual rules after the pandemic measures taken by the authorities in Switzerland will be confronted with new situations by this new provision.
    Because questions regarding withholding tax and the amount of withholding tax in particular have to be answered, it is worthwhile to request a written statement from the responsible canton if there is any doubt. As is generally known, employers are liable for withholding taxes not paid.


These are just a few points that need to be considered. The companies should deal with this in detail and be able to answer the questions regarding the creation of a permanent establishment abroad, the application of mandatory labour law combined with specific telework rules, the need for work permits and other provisions in the respective country. Furthermore, not all cases of telework are covered by the transitional social insurance scheme until 31 December 2022 according to the CH-EU Agreement on the Free Movement of Persons and the EFTA Convention, which can lead to subordination situations in several countries.

The very current topics will also be covered in detail at the seminar on 2.9.2022 (in German):

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