Chapter 1 – General Aspects:
Despite the increasing digitalization and the facilitated virtual meetings via Teams & Co., business trips remain an integral part of the daily routine for many internationally working employees. While the pandemic years brought business travel to a virtual standstill for a while, it is experiencing an unexpected renaissance today.
Existing teams gather projects are initiated, clients are visited, new markets are tapped into, and participation in trade fairs, further education, or meetings takes place. Whatever the reason for the business trip may be, the administrative compliance aspects remain generally the same and must be rigorously clarified for each individual case.
In the past, it was quite common practice to go on business trips with a tourist visa and generously waive the A1 certificate, but those times are long gone. Nowadays, most companies cannot and do not want to forgo the necessary compliance in business travel to minimize liability risks.
In the following five-part series, we will delve into the essential legal aspects of international business travel without getting lost in the depths of specific details. This will provide you with a solid overview of the necessary administrative steps for international business travel. These steps essentially include:
Social Security (A1 & Certificate of Coverage)
Applying for A1 certificates and certificates of coverage is now standard practice for business trips abroad. Even if the A1 certificate is not often checked, it should be obtained as a precautionary measure to minimize inconvenience for traveling employees. After all, who wants to be responsible for the urgently needed service technician being denied access to the French construction site or the CFO being held up at the Italian airport due to a missing A1 certificate?
Income Taxes (183-day rule and de facto employer)
Tax liability must also be examined for international business trips. This is necessary at least when the business trip lasts longer, costs are billed abroad, or there may be a de facto employer. It is, therefore, essential to correctly assess the so-called 183-day rule and to keep an eye on any special regulations such as the overarching taxation in the Germany-Switzerland relationship or the mentioned de facto employer.
Work Permits and Reporting Obligations
The necessity of a work permit or reporting obligation for business trips within the European Union and Switzerland is a case-by-case question that must be examined based on the specific situation of the employee. It is also important to differentiate between the permits and reporting obligations arising from the labor permit law ("Business Immigration") and the reporting obligations within the framework of the European "Posted Worker Notification."
For instance, a Swiss employee on a 3-day business trip to France may not require a work permit, but they do need to register within the framework of the European "Posted Worker Notification" (in France SIPSI). Otherwise, they risk facing significant penalties.
Conclusion
Compliance with international business travel remains a major challenge for companies. With advancing globalization and the digital networking of public authorities, the demands on companies to ensure that their employees' business trips are legally compliant are increasing.
It is perfectly understandable if the bigger picture sometimes gets lost. It requires not only in-depth specialist knowledge in the HR departments but also knowing which employees are on business trips, where, and for how long. For small and medium-sized companies in particular, this first step in the process is still almost impossible to manage.
Therefore, traveling employees are also called upon to familiarize themselves with the legal aspects of international business travel and to adequately inform the HR department so that the necessary steps regarding A1 certificates, taxes, reporting procedures, work permits, and the like can be initiated.
It is crucial to raise awareness among employees about the issues involved in ensuring compliance with international business travel. Companies and HR departments, which often feel challenged and sometimes overwhelmed, should not hesitate to seek the services of specialized consultants, as this is the only way they can refocus on their core tasks.
- Chapter 1: General Aspects: Business Travel in Switzerland and the EU
- Chapter 2: Social Security Aspects of International Business Travel
- Chapter 3: Taxation Concerns for Business Travel to or from Abroad
- Chapter 4: Work Permits and Reporting Procedures for International Business Trips
- Chapter 5 (Monthly Special): Detailed Case Study on Business Travel from the USA to Switzerland – Social Security, Taxes, Permits
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.