Swiss employers allowing employees to work remotely abroad must consider taxes, social contributions, and data privacy. Generally, remote work abroad for up to 25% of working time is safe from a social contributions perspective. Depending on the country, it can be more.
Summary (TL;DR)
- When allowing employees to work remotely, you must consider taxes (both for the company and for the employees), social contributions, and data privacy.
- Generally, remote work abroad for up to 25% of the time is safe. It can be more depending on the country.
- Posting is an interesting solution to allow a formerly Swiss-based employee to work from abroad for a defined period of time.
- Book a free call with us.
What is remote work?
Remote work usually involves working outside the normal office premises – at home or at any other location. Working hours are usually very flexible and can be freely arranged. In principle, with a completely remote position, you do not have to come to the company on-site at all. It has to be distinguished from “working from home”, which means working from a designated private environment. There are no clear barriers, and the concepts are fluid.
What to consider when allowing remote work?
Office space
The employee could be entitled to compensation if he works permanently outside the office premises and the employer does not provide him with a workplace. Concretely, this means that the employer could have to pay for the furniture, the tech material required, or even the difference of rent for an additional room.
Taxes
Cross-border taxes are a complicated topic. For individual cases, we advise you to speak with a tax expert. Reach out to us if you would like to be put in contact with our tax expert.
Employee taxes
Double-taxation treaties provide specific rules and usually refer to the notion of residence. They are, however, usually not suited to remote work but can be interpreted by analogy, keeping in mind their purpose being to avoid double taxation. As long as the employee remains resident in Switzerland and does not spend more than a defined number of days in one other country (e.g., 183 days for France and Germany), they will not, as a rule, become liable for taxes abroad. In the absence of a double-taxation treaty, the employee might be taxed both in Switzerland and abroad. You can find more information on the double-taxation treaties concluded by Switzerland here.
Corporate taxes
If you employ (in particular) executives who regularly and continuously work in a cross-border home office, there is a risk that the home office situation will give rise to a permanent establishment abroad. This means that you run the risk of becoming liable to tax abroad on part of the business profits. For normal employees, it is usually fine as long as there are less than 5 employees in a given country and if they effectively support the Swiss business and do no work locally. However, this is not a rule and must be assessed on a case-by-case basis.
Social contributions
Generally, a Swiss employee performing up to 25% of their working time abroad will remain subject to Swiss social contributions rules. Switzerland recently signed a multilateral agreement (notably with Austria, Belgium, Germany, and Spain; but not with France or Italy) allowing cross-border workers who are employed by a Swiss employer and who work remotely for a maximum of 49.9% of their total working hours from one of these countries to remain subject to Swiss social security. The agreement lists criteria and provides for some exceptions to be analysed on a case-by-case basis. For countries outside of the EU/EFTA area, specific rules can be found in bilateral social security agreements. In general, the place-of-acquisition principle applies. Without such agreements, a double subordination could arise.
Data protection
According to privacy laws, employers must ensure data security through appropriate technical and organisational measures. This includes:
- VPN
- Ensure that unauthorised people cannot view the screen (screen lock, cover, etc.)
- Ensure that physical files are not stored and destroyed at home
- Workshops on data security
- Policy: A remote work policy is in place. It notably clarifies whether and where remote work is authorised, and what measures must be taken (VPN, call confidentiality, etc.).
- Desk: Desk sharing is provided, and the employees have the right, but not the obligation, to work remotely. This usually prevents the employer from having to pay expenses for the employee’s remote work setup.
FAQs
How much can a Swiss employee work remotely abroad?
Generally, up to 25% of working time abroad is safe for social contributions. A multilateral agreement with Austria, Belgium, Germany, and Spain allows up to 49.9%. France and Italy are not covered.
Can remote work abroad create a permanent establishment for my Swiss company?
Yes. If executives regularly work from a cross-border home office, this can create a permanent establishment abroad, making the company liable to tax on part of its business profits there.
Does my company need to pay for an employee’s home office setup?
Possibly. If the employee works permanently outside office premises and the employer doesn’t provide a workplace, compensation for furniture, tech equipment, or additional rent may be required.
What data protection measures are required for remote workers?
Employers must ensure VPN usage, screen locks/covers, proper destruction of physical files at home, and conduct data security workshops for remote employees.
How do I get this done?
Check out our remote work workshop package and book a free call with us to discuss the next steps.
