Why Switzerland’s cross-border workers living in France will have to spend less time working from home

From September 1st, cross-border commuters based in France but employed in Switzerland will no longer be able to work from home for the whole week without having to change their tax status.

Why Switzerland's cross-border workers living in France will have to spend less time working from home
Cross-borders will have to commute to their Swiss workplace. Photo by Fabrice Coffrini /AFP

Cross-border employees from France will be allowed to work at home a maximum of 25 percent of their usual work schedule.

If they work more than that after September 1st, they would have to pay their taxes in France rather than in Switzerland.

According to RTS broadcaster, this ruling is based on the recent agreement between European states concerning payroll taxes.

In Geneva, cross-border workers normally pay their taxes and social security contributions in Switzerland. 

But if they work more than 25 percent of time at home in France, they and their Swiss employers have to pay these charges in France, which would be much higher.

According to Véronique Kämpfen, Director of Communication for the federation of French-speaking companies, “in Switzerland, the employer and employee each contribute around 6 percent of the salary”, she told RTS television.

In France, “the system is extremely complex. The employer can pay charges of up to 40 percent, and the employee up to 12 or even 15 percent”, she added.

During the coronavirus health crisis, this regulation was suspended to allow cross-border employees, like their Swiss counterparts, to work from home without having to change their tax status.

However the rule will be reinstated from September.

“However, if there is a second wave, we will have to re-discuss this matter with the neighbouring states”, Stephan Cueni, vice-director of the Federal Office of Social Insurance, told RTS.

German citizens working in Switzerland have a longer deadline: they can work from home until December 31st without impacting their tax or social security payments. 

No decision has yet been released concerning Italian workers.

About 85,000 workers commute to their jobs in Geneva each day from the nearby French regions of Haute-Savoie and Ain.

More than 67,000 Italian cross-border workers are employed in Ticino, and over 33,000 Germans work in Switzerland.

In total, 329,000 foreign commuters work for Swiss companies.

Cross-border commuters can be employed in Switzerland thanks to a bilateral agreement, The Free Movement of Persons, that the government signed with the countries of the European Union. It allows EU nationals free access to the Swiss labour market.

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Tax hikes of up to 60% for French second home owners

Towns and villages through France are raising property tax rates for second-home owners, with many areas voting for the maximum 60 percent increase.

Tax hikes of up to 60% for French second home owners

Even though France’s taxe d’habitation (householders’ tax) is in the process of being phased out for most French residents, second-home owners are still required to pay it.

This year more towns have voted to increase it, and others have recently gained the ability to add a surcharge for second-home owners, with French daily Le Parisien reporting that the residence tax “continues to soar.” 

Municipalities in zones tendues (areas with a housing shortage) have the ability to choose to increase taxe d’habitation by up to 60 percent for second home owners.

From 2023, several new areas – including Nantes – will join the list of zones tendues, meaning they will be able to vote to increase taxes for second-home owners.

This year, large cities such as Bordeaux, Lyon, Biarritz, Arles and Saint-Jean-de-Luz saw their city councils vote to increase the tax at the maximum 60 percent.

READ MORE: Why some French cities are increasing taxes for second-home owners

Some areas have still not chosen to apply the increase, but those looking to buy a second home in France should beware that these municipalities could vote to increase the taxe d’habitation in the future.

In 2020, cities on average voted to increase the residence tax on second homes by 248.50, in comparison to €217 in 2017. This year, that amount is expected to be even higher.

On top of the taxe d’habitation, second-home owners also have to pay the separate taxe foncière property tax, which is itself rising sharply in many areas.