Switzerland and France sign an additional agreement supplementing the bilateral double taxation agreement

Bern, 27.06.2023

On  June 27,  2023 in Paris, State Secretary Daniela Stoffel signed an additional agreement containing new and permanent taxation rules for income from home working, as a supplement to the bilateral double taxation agreement. The additional agreement permits cross-border home working for up to 40% of annual working time – especially for cross-border commuters. It is part of the solution agreed at the end of 2022 with regard to home working.

Swiss State Secretary Daniela Stoffel

On  June 27, 2023 in Paris, State Secretary Daniela Stoffel signed the additional agreement which allows employers and employees throughout Switzerland to agree on cross-border home working for up to 40 % of annual working time. Within the limits, the agreement makes provision for remuneration in connection with home working to be taxed in the contracting state in which the employer is located. The new solution also envisages that the country of the employer will transfer to the employee’s country of residence 40 % of the tax which it has levied on the remunerations from home working in the country of residence. In order to ensure that the new rules are applied, an automatic exchange of salary data is planned.

The additional agreement also updates other provisions in the double taxation agreement between Switzerland and France. In particular, it brings the double taxation agreement into line with the results of the OECD’s efforts to combat base erosion and profit shifting (BEPS).

The cantons and interested business sectors have welcomed the conclusion of the additional agreement. It still has to be approved by the legislator in both countries before it can come into force. Until such time, Switzerland and France have agreed to apply the provisions of the additional agreement until 31 December 2024, on the basis of the temporary memorandum of understanding of  December 22, 2022.