Part 3: Home Office For Cross-Border Commuters In The Tri-Border Region (Switzerland, France, Germany)

Author:  Norma Reynov  ,  CONVINUS global mobility solutions

For the German version, please read here >>

Home office is here to stay – also for cross-border commuters.

Cross-border commuters are an integral part of the workforce for many companies located in the tri-border area of Germany, France, and Switzerland. Without them, many operations would no longer run smoothly or at all. At the same time, cross-border employment brings its own set of tax and administrative complexities, even without factoring in home office arrangements.

But what happens when a German or French cross-border commuter no longer works exclusively in Switzerland but completes part of their working hours from home? This is a question companies must inevitably address if they want to attract and retain talent from neighboring countries.

Since the pandemic, the concept of location-independent work (and working from home in particular) has fundamentally changed. Employers and employees alike have realized that home office is technically feasible even across borders. However, especially for cross-border commuters, working from home at their place of residence abroad introduces a number of additional tax and social security issues that must be clarified to ensure compliance.

When home office becomes a stumbling block

In practice, many cross-border commuters no longer work 100% on-site in Switzerland. One or two days per week in the home office is no longer uncommon – and may not seem problematic at first glance. However, in the tri-border region, specific regulations apply that directly affect such situations and must be assessed on a case-by-case basis.

Take this example: A German cross-border commuter has been working for a Swiss company for many years. She commutes daily to work but has recently moved much further away and now wishes to work from home in Germany on Mondays and Fridays. From a personal perspective, this is ideal – less commuting time, better work-life balance, and more flexibility. However, from a tax point of view, new questions arise that the employer must actively address.

For instance, if the employee no longer qualifies under the Swiss-German rules for "regular" cross-border commuters, she may be reclassified. This could result in changes to Swiss withholding tax obligations as well as implications for her taxation in Germany.

What HR and Payroll need to know

It has long been clear to HR and payroll departments that working from home is not purely a matter of work organization for cross-border commuters, but can also have direct implications for tax and social security law. This is particularly true when working from home abroad on a regular basis or to a significant extent.

The different cross-border commuter regulations between Switzerland and Germany, Switzerland and France, as well as Germany and France make it even more difficult for HR and payroll departments to comply with the law, as the regulations on cross-border commuter taxation vary considerably and are also characterized by numerous special provisions.

The lack of harmonized implementation between countries makes tax assessment complex. This is precisely why clear internal regulations for home office work for cross-border commuters are crucial. These include, for example:

• Clarifying whether home office is permitted for cross-border commuters at all.
• Defining a maximum number of home office days allowed per year or month.
• Requiring prior approval and structured documentation.
• Ensuring proper tracking and communication to payroll.

Conclusion

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.