Swiss employers of French cross-border teleworkers

Deadline: 30 June 2024

To avoid having to pay some of the highest taxes in Europe (withholding tax and social security contributions), cross-border teleworkers must comply with the maximum limit for teleworking in France and have their A1 certificate (see below).

Since the bilateral agreements came into force in 2002, employers have been able to hire cross-border commuters relatively easily without quotas. Thanks to the good economic climate in the Lake Geneva region, this has led to a steady rise in the number of cross-border commuters, which has tripled in Geneva (to more than 105,000 by the end of 2023) and quadrupled in the canton of Vaud (to more than 45,000 by the end of 2023).

With the habits acquired during the pandemic and the exceptional arrangements applicable to teleworkers, some cross-border commuters wanted to continue teleworking, in order to avoid the commute and the few inconveniences that face-to-face work entails.

Employers who have agreed to telework after 1 July 2023 would be well advised to inform themselves of the risks involved and the precautions to be taken in order to provide a framework for this practice and avoid certain risks, in particular that of being subject to compulsory deductions (taxes and social security contributions) in France, which are among the highest in Europe, as shown in the table below:

Employers, who were already having trouble getting to grips with the social insurance and source tax regulations applicable to cross-border commuters, must now also comply with the new rules, which came into force on 1 July 2023 with some haste. More than ten months after their introduction, here is an update on the situation.

Social insurance

The major risk: the cross-border commuter's entire income from work carried out in Switzerland and France will be taxed in France at French rates.

The legal response: stay below the limits set and apply for an A1 certificate

If a cross-border commuter works in both Switzerland and France, the principle is that the employee is subject to social insurance in France if he or she carries out 25 % or more of his or her activity in France (a rule already applicable since 2012) or 50 % or more of teleworking in France (thanks to the multilateral agreement on social security signed between Switzerland and certain EU countries, in force since 1 July 2023).

Even though Switzerland and France have set the limit at 49.9 % for telework in France, the limit set for tax purposes at 40 % means that it is in fact this limit of 40 % for social security purposes that must also be respected in practice (see below, the section entitled «for tax purposes»).

Requirement to apply for A1 certificate for cross-border teleworkers

In order for the new multilateral agreement on social security signed between Switzerland and certain EU countries, including France, to apply and for cross-border commuters to remain subject to social insurance in Switzerland for all their activities, Swiss employers must request an A1 certificate from their AVS compensation fund by requesting access to the ALPS (Applicable Legislation Portal Switzerland) platform.

The purpose of this A1 certificate is to determine the national legislation applicable to its holder, in accordance with the rules of coordination between Switzerland and the EU/EFTA (maximum validity of the certificate of 2 years or even 3 years, renewable).

The application must be submitted before 30 June 2024, as a special transitional provision will allow the A1 certificate to cover retroactively the period from 1 July 2023 for all applications submitted up to the end of June 2024. We strongly recommend that employers complete this formality without delay if they have not already done so, given that it takes around two months to process the application.

Otherwise, application of the agreement will, according to the information received, be refused. Employers will have to tax their employees in France for income earned in Switzerland and in France, which will be much more costly and time-consuming in terms of administrative procedures.

The same applies if, in France, the frontier employee exceeds the aforementioned limits of 24.9 % of usual activity or 49.9 % of frontier teleworking. In France, administrative penalties and fines would be imposed in the event of failure to present form A1 during an inspection. It should be noted that the social security agreement between Switzerland and France on teleworking does not apply to people who :

• In addition to teleworking in their State of residence, habitually carry out another activity there (e.g. regular visits to clients, ancillary self-employed activity)
• In addition to teleworking in their State of residence, habitually carry out an activity in another EU or EFTA State
• In addition to working for their Swiss employer, work for an employer located in an EU or EFTA state.
• Are self-employed

Tax issues

The risk: taxation of the employee in France with liability on the part of the Swiss employer

The legal response: stay within the limits set

As a reminder, from 1 July 2023, if an employer wants to prevent an employee from

cross-border commuter is taxed at source in France and is responsible for deducting the tax in France.

In order to ensure that the French source complies with the following three limits:

• 40 % of teleworking in France on average over the year in relation to the business
• for cross-border commuters
• Ten days of temporary assignments in France to be included in the
• the 40 % limit referred to in the previous indent
• Forty-five days a year of non-return to the French domicile, including all
• temporary assignments in a country other than France

Up to these limits (keeping a certain margin is advisable), the teleworking activity will benefit from cross-border status from a tax point of view and the employee will continue to be taxed at source in Switzerland or to be exempted via the tax residence certificate (see below).

To check whether the 40 % teleworking rate is respected, it is necessary to establish, on the basis of an accurate count, the ratio between the number of days teleworked in France (including, where applicable, up to ten days of temporary assignments in France) and the overall number of days worked, without taking holidays or weekends into account. For example, for a full-time job assuming 240 working days, the limit to be respected is 96 days teleworking, including the limit of temporary assignments in France (40 % of 240 d. = 96 d.).

If teleworking days exceed 40 %, the totality of these teleworking days in France must be taxed in France via the French withholding tax system, which is prohibited by the Swiss penal code. It is therefore very important to comply with the above limits.

Reminder: the certificate of tax residence in France shifts responsibility for tax onto the employee

Cross-border commuters who work in the cantons of Vaud, Valais and Neuchâtel (but also Jura, Bern, Basel-Stadt, Basel-Landschaft or Solothurn) and who return to their French home at least four days a week on a full-time basis will not, in principle, pay tax in Switzerland if they provide a certificate of French tax residence. In that case, he will be taxed in his State of residence, i.e. in France.

Reminder: withholding tax on employees in Switzerland

Employers must deduct tax at source in Switzerland from the income of their cross-border commuters in the following cases:

If the employment relationship takes place in Geneva or in Swiss cantons other than those mentioned above, as the tax residence certificate system does not apply.

If the employee does not provide his employer with a certificate of tax residence in the cantons referred to in the previous paragraph

If he doesn't come home an average of four nights a week for a full-time job

Another risk for the employer: the creation of a permanent establishment subject to tax in France

The legal response: avoid fulfilling the conditions set or complete the relevant formalities

Teleworking in France also creates the risk of the creation of a permanent establishment in France that might exist, particularly if the employee in question generates income there or carries out operations there that form a complete business cycle. The solution is to refuse teleworking to employees who risk creating such a permanent establishment or to complete the related formalities with the support of a local accounting and tax firm in France.

Legal and contractual

The risk: application of French law and the costs of teleworking

The solution: the teleworking agreement

French labour law will apply to the employment relationship between the employer and the employee teleworking in France.

As Swiss employers are generally unaware of French labour law, it is appropriate to limit its application, without however being able to exclude it, since mandatory French labour law will in any case apply to the part of the activity that the employee carries out in France.

It is advisable to stipulate in the teleworking agreement with the employee that teleworking in France is permitted by the employer at the employee's request, but under the employee's full responsibility, and that it remains governed by Swiss law, reserving mandatory French labour law for the activity that the employee carries out in France.

Who covers the costs of teleworking? It depends on who pays.

To answer this question, we need to distinguish whether teleworking is imposed by the employer or introduced at the employee's request. In the first case, the employer must provide the equipment or compensate the employee for the use of private equipment. A flat-rate monthly allowance of CHF 30 for the use of standard private equipment and CHF 300 for the rent for the use of a room during office hours for a full-time employee (including heating, electricity, internet subscription and telephone) in the Lake Geneva region would seem acceptable. This allowance will have to be reduced proportionately or adapted for part-time work and in border regions.

In the event that teleworking is carried out at the employee's request and the employee has a fully-equipped workplace on the company's premises, it is, in principle, up to the employee to bear the costs associated with teleworking.

The telework agreement

It is advisable to regulate the various aspects of the French teleworker's contractual relationship in a telework agreement. Ideally, the agreement will cover all the above aspects, in particular the obligations to respect the above-mentioned limits as well as Swiss and mandatory French labour law. It will also include the obligation to keep an accurate record of the above-mentioned data, to report any changes in the employee's situation and the consequences of exceeding these limits and, finally, the question of expenses.

Sources :

• Directives on compulsory AVS and AI insurance (DAA), valid from 1.1.2009, status 1.1.2024.
• Directive concerning the taxation of cross-border commuters domiciled in France and working in Switzerland for a Vaud employer for the year 2023, published by the Vaud Cantonal Administration.
• Double taxation agreement between Switzerland and France and other publications relating to relations between the two countries, in particular those concerning cross-border commuters and teleworking
• Practical information sheet of 23 October 2023 on the amicable Franco-Swiss agreements concerning the regime applicable to teleworking under the border agreement of 11 April 1983
• Le télétravail, Questions de droit du Centre Patronal Vaudois, November - December 2022 / n° 138.
• Le télétravail, Défago Valérie, Jean-Philippe Dunand, Pascal Mahon, Schultess éditions romandes, 2022.
• Les conséquences du télétravail transfrontalier sur le système de sécurité sociale et le régime fiscal des travailleurs, dissertation submitted by Julia Mühlberg, under the supervision of Professor Rémy Wyler, 13 April 2023.