Author: Norma Reynov , CONVINUS global mobility solutions
For the German version, please read here >>
New flexibility & new challenges
We already saw it coming. Remote work is here to stay - also across national borders. Employees today not only wish to work independently of location; they increasingly expect it as a given.
For many, it starts with working from home. But depending on the company culture, it can quickly evolve. A permanent residence abroad, a longer visit to a partner, or a two-week stay with family abroad become reasons to shift the place of work temporarily or even permanently to another country. What may seem straightforward at a first glance often has very concrete consequences from an HR and payroll perspective; especially in terms of tax assessment and the practical implementation of administrative requirements.
In the first step, it is not important for HR or payroll personnel to correctly resolve all hybrid work or remote work cases, but rather to develop an awareness of which foreign activities pose a risk to the company and which cases tend to be uncritical. In this article, we therefore look at three typical case groups and explain what is important in each of the various remote work constellations.
1. Remote work / hybrid work as a permanent way of living and working abroad with a Swiss employer
In this scenario, the employee lives and works mainly and permanently at the same foreign residence, but has a Swiss employment contract. A relocation to Switzerland is not planned.
Example: A mid-sized Swiss company hires an experienced sales manager based in the UK. The role involves frequent travel within Europe and North America, as well as 3–5 days per month in Switzerland for internal meetings.
The sales manager is not willing to relocate to Switzerland and the position does not require it.
What needs to be considered in terms of taxes?
Because of the residence in the UK, the employee is subject to unlimited tax liability there. In addition, a limited tax liability arises in Switzerland for the Swiss workdays, since the employer is based in Switzerland. The employee's frequent business trips must also be documented in a travel calendar, which should be regularly reviewed to identify any additional tax obligations in other countries.
This means in practice that a UK payroll must be set up for UK tax withholdings. For the Swiss workdays, Swiss withholding tax must also be calculated and paid to the competent Swiss tax authority. Especially for mid-sized companies, this setup may seem challenging at first. However, with the support of external payroll partners, these processes usually become well established after 2–3 months and are no longer a major issue after that.
It should be noted that this type of setup can (and will) involve further topics, such as: social security affiliation in the UK, A1 or CoC forms, assessments to reduce permanent establishment risk, reporting obligations under the Posted Workers Directive (PWD), and a work permit for the Swiss workdays.
2. Remote work / hybrid work with longer or regular stays abroad
In this case, the employee remains officially resident in Switzerland, but performs part of their work from abroad (for example, during recurring stays in a European country). At first glance, working abroad may seem unproblematic, but regular or extended periods of absence quickly raise questions about possible tax consequences abroad.
Example: A marketing manager is employed in Switzerland and lives there. While on vacation, he meets his new partner in Spain and begins travelling there frequently. Each stay lasts from several days up to two weeks.
What are the tax challenges in this case?
This may appear relatively harmless at first. However, it is especially important here to monitor the recurring workdays in Spain and assess them correctly from a tax perspective.
To avoid unnecessary administrative complications, it is advisable to proactively communicate with the employee and explain the possible consequences.
The goal should be to ensure the 183-day rule continues to apply, so that the employee does not become taxable in Spain. This requires maintaining a travel calendar and strictly observing the 183-day threshold per calendar year.
In addition, the company must consider further administrative requirements such as obtaining an A1 certificate or complying with notification requirements under the Posted Workers Directive (PWD) in Spain.
3. Remote work / hybrid work with shorter, sporadic stays abroad
These cases may seem harmless at a first glance. The employee remains employed and resident in Switzerland, with their main place of living unchanged, and is abroad only for a short period. Depending on company culture, there may already be established guidelines for such cases or each situation needs to be assessed individually. Companies that generally allow hybrid work but prohibit remote work from abroad entirely run the risk that employees will still work from another country without informing HR or payroll and that they are creating hidden compliance risks.
Example: A German employee with a Swiss employment contract would like to visit his parents in Berlin for two weeks and also work from there. He lives with his spouse in Switzerland and does not hold a management position in the company.
From a compliance perspective, similar cases are likely to be unproblematic in many European countries. Still, even short-term work abroad can involve reporting duties or the need to request A1 certificates. If senior staff members are involved, even short work assignments abroad may pose a permanent establishment risk, which should be assessed and, if necessary, minimized.
Conclusion: Clarity about work locations creates legal certainty
Remote work involving foreign countries has long been part of everyday working life and affects not only managers and specialists. Hybrid working models in particular are giving rise to new constellations that can quickly become confusing from a tax and administrative perspective without clear rules. It is, therefore, crucial for HR and payroll departments to know at an early stage who is working where and how often. A simple request form for international work, clearly defined thresholds (e.g. a maximum of 20 workdays abroad per year), and a policy adapted to the company's needs can make a significant difference. At the same time, companies should decide which models they are willing to support and which not. Depending on the setup, even short-term remote work can trigger complex questions around tax and social security. In the next part of this series, we will look at cross-border home office models and in particular what needs to be considered in classic commuter constellations in the tri-border area between Germany, Switzerland and France.
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.
