Flexibility in the world of work is constantly increasing, especially with regard to the place of work and the organisation of working hours. For this reason, companies must address the extent to which they can and want to offer flexible forms of work and for which employee groups in order to remain attractive as an employer.
The impact on business should be carefully assessed by area of legislation before such models are introduced.
In the following, a few selected areas of applicable law in relation to the flexible workplace are covered:
- Does teleworking/home office of employees lead to a permanent establishment under Swiss tax law?
This question within Switzerland was dealt with by the Swiss Tax Conference (SSK) and the result was published on 26.4.2022 under the following link (available in German and French) https://www.steuerkonferenz.ch/downloads/Dokumente/Analysen/220425_Analyse_Teletravail_DE.pdf. Those responsible for corporate taxes should go through these explanations and compare this with the concrete situation in the company in order to know the consequences and to take decisions.
It should not be disregarded that companies are now considering allowing their cross-border workers to perform their work in a co-working space in Switzerland close to the border due to various aspects and risks involved in teleworking abroad. Depending on the circumstances, this could lead to a permanent establishment.
In connection with teleworking by cross-border commuters and international weekly residents, it is essential to take into account the provisions of the countries of residence concerned. The provisions on the establishment of a representative permanent establishment must be specifically examined.
- Does teleworking/home office of employees within Switzerland lead to a different cantonal responsibility in the area of social security?
Employers are obliged to report all branch offices to the competent compensation office. This information is recorded in the member register and reported to the cantonal central registers. Various information on the branch office can be found at the following link (available in German, French and Italian): https://www.eak.admin.ch/eak/de/home/Firmen/Anschluss/zweigniederlassungen.html
The assessment regarding the existence of a permanent establishment under social security law may differ from the assessment under tax law under certain circumstances.
As a result, depending on the canton, in addition to the deductions/contributions for AHV (old age insurance)/IV (disability insurance) /EO (Income replacement regulation) and ALV (unemployment insurance), other cantonal provisions must be taken into account for the employees, such as maternity insurance (Geneva) or the social fund (Schaffhausen), etc.
For the payment of child allowances and family compensation fund contributions, the provisions of the FLG (Family Allowances Act for Agriculture) or FamZG (Family Allowances Federal Act) and the relevant cantonal laws apply. The Guide to the Family Allowances Act (FamZWL) describes when a permanent establishment exists for the purposes of family allowances and contributions. Depending on the circumstances and the canton, intercantonal agreements may be reached.
The social security challenges of teleworking/home office abroad can lead to particular complexity. I refer to the following explanations: https://www.zulaufgmbh.ch/en/france-the-flexible-application-of-the-subordination-rules-for-social-security-due-to-covid-has-been-extended-until-30-6-2022/
- Does teleworking/home office of employees within Switzerland lead to a different cantonal responsibility in the area of withholding taxes?
For withholding tax payers domiciled in Switzerland, the answer is clearly no, because the canton of domicile and not the canton of employment is the competent canton.
For those with residency abroad, a distinction must be made as to whether they are international weekly commuters with registration in a canton of weekly residence or cross-border commuters with a daily return. Separate regulations apply to special cases such as artists, athletes, speakers, board members, etc.
For the group of genuine cross-border commuters, special attention must be paid to the question of cantonal responsibility, especially in the case of coworking spaces newly offered by the employer in the area close to the border. Depending on the characteristics, this could become the determining canton.
The following seminars, which you can attend, deal with various aspects of the above topics:
The basics of withholding taxes for payroll accountants and HR on 10.1. and 12.1.2023 each from 14:30 – 18:00 cover, among other things, cantonal responsibilities (in English): https://www.zulaufgmbh.ch/en/course/fundamentals-of-withholding-taxes-in-swiss-payroll/
The consequences of teleworking/home office abroad for cross-border commuters and international weekly residents will be explained in detail at the training session on 29/30 June 2022 in the afternoon (in German): https://www.zulaufgmbh.ch/kurse/grenzgaenger-und-internationale-wochenaufenthalter-im-homeoffice-nach-der-pandemie-spannungsfeld-zwischen-new-normal-und-risiken-fuer-die-unternehmung/
For more in-depth training on the relevant social insurances in an international environment, the seminar Cross-border Social Insurances for HR and Payroll is offered on 30.8., 1.9., 6.9. and 8.9. each from 16:00 – 17:30 (in German): https://www.zulaufgmbh.ch/kurse/grenzueberschreitende-sozialversicherung-fuer-hr-und-payroll/
