Switzerland and France have agreed not to change the taxation of French cross-border commuters for the time being. Now they are negotiating a definitive solution.
Cross-border commuters crossing from Evian-les-bains to Lausanne on a CGN Mobilité ship.
French cross-border commuters can continue to work from home for their Swiss employers at least until the end of the year without their taxation changing. This is a special regulation. Switzerland and France have extended a corresponding provisional agreement that would have expired on October 31. The agreement was made in spring 2020 due to the corona pandemic and has been renewed several times.
France is losing patience
The two countries also want to continue negotiations in order to find a permanent solution to the taxation of French cross-border commuters who work from home by the end of the year. If there is no agreement, Paris no longer wants to extend the special regulation for a limited period, according to the Ministry of Economics and Finance. France hopes that the two countries can find a lasting solution that is fair in terms of tax policy.
The goal for Switzerland is also a long-term solution, as the State Secretariat for International Finance (SIF) said on request. The canton of Geneva levies the withholding tax for its approximately 100,000 cross-border workers at the companies and transfers a portion of it to the neighboring regions in France.
On the other hand, the French authorities levy taxes on their resident taxpayers who work as cross-border workers in eight cantons, mainly in the Jura arc (BS, BL, JU, SO, BE, NE, VD, VS), and pay the tax authorities in Switzerland compensation. In May 2020, Switzerland and France agreed not to change the taxation of cross-border commuters working from home for the time being.
However, if neither a new transitional nor a definitive solution is found by the end of the year, employers in the canton of Geneva would have to decide whether to continue allowing French cross-border commuters to work from home. The agreements between Bern and Paris concluded before the pandemic would then apply.
Under French law, companies outside of the eight cantons of the Jura arc would then have to levy withholding taxes on the French authorities for days worked in France. According to the penal code, however, “actions on Swiss territory for a foreign country without authorization” are prohibited. As a result, French cross-border commuters, especially in the canton of Geneva, could de facto hardly work from home.
Limit under discussion
A limit value for the taxation of cross-border commuters is now being discussed, up to which home office is allowed without changing the tax policy responsibility. According to Ivan Slatkine, President of the Geneva Employers’ Association FER, a change in the law is underway in France that will allow cross-border commuters to work from home for 25 percent of the working hours. It would be a shame if French cross-border commuters could not work from home at least one day a week, Slatkine told French-speaking Swiss radio RTS. Because it would be annoying if there were two different systems, one for the Swiss and one for cross-border commuters.