21 December 2023
Employment Tax
Impact Medium
Summary
This bulletin provides a brief update for the upcoming year (2024) and summary of 2023 hot topics which impact the upcoming year too.
The Detail
Cross-Border Commuters
● Changes in the withholding tax set-up for cross-border commuters from Italy into Switzerland and the grandfathering rule for existing Italian cross-borders. Moreover, a new home office rule (25%) is introduced for this population.
● New regulations for cross-border commuters and teleworkers between Switzerland and France: The teleworkers are allowed to work remotely for up to two days per week (equivalent to 40% of work time) without impacting taxation rules, and this includes business trips within their resident country or a third country, not exceeding 10 days annually.
Teleworking
● On July 1, 2023 the new rules for teleworkers in the EU/EFTA were introduced, enabling telework in home office up to 49.9% in the home state (different from the employer state) without switching applicable social security law. The applicability is bound to various conditions and A1 is mandatory. Furthermore, the interaction with especially individual tax matters should not be neglected.
Immigration – Increased spot checks to be expected for 2024
● During the past few years, there has been an increasing number of authority spot checks on online notification.
● This is also related to the increasing importance of PWD in the EU and the need to be compliant when sending employees to work in other countries.
● Spot checks can be time-consuming and require a set of documents to be submitted with the authorities (such as pay slips, timesheet, letter of assignments, etc.)
● It is recommended that companies do a thorough assessment of the activities of their foreign employees when working in Switzerland and obtain the right permit in time, if needed.
● It is crucial that online notifications are submitted in time and that mandatory obligations such as Swiss reference salary are respected.
Immigration – Work permit quotas for 2024
● Based on the number of permits issued in the past years, the federal agency has decided that the work permit quotas for 2024 will remain the same as in 2023.
● Considering that approximately 65% of the quota has been used up in 2023, there should be sufficient quota for 2024.
Immigration – ETIAS update
● The European Union has postponed the launch date of the European Travel Information and Authorisation System (ETIAS) until May 2025. The information has been confirmed by the European Commission and the new timeline is published in their official website.
● ETIAS stands for European Travel Information and Authorisation System. It is a digital pre-travel authorisation that gives an individual ‘permission to travel’ to the Schengen zone.
● The revised launch date is now anticipated to be in May 2025. Additional delays may occur if the EES (Entry-Exit-System) is not operational by that time. The expectation is that ETIAS will only enter into operation five to six months after the EES activation.
● Visa free nationals to the Schengen zone will not require an ETIAS until mid-2025.
Double Tax Treaties
● New double tax treaties: Ethiopia (as of 01.01.2024)
● Updates on double tax treaties or underlying regulations: France, Germany, Italy, Slovenia, UAE
Social Security / Agreements
● New social security treaties: Albania (01.10.2023); UK (as of 01.10.2023); Framework agreement for teleworkers
● Basically Swiss social security contribution rates remain unchanged, there may be changes in the family allowance contributions in some Cantons.
● Age of retirement levied for women born in or after 1964 to 65 years.
● The “AHV 21” comes into force, for 2024 this means in a first phase especially
incentives to continue work after retirement age as the contributions to be paid can now also have an influence on the state pension being paid out.
How we can help
Vialto Partners Switzerland is hosting a webcast on Wednesday, 24th January 2024, 9 – 10 am, which provides more insights about the changes briefly highlighted in this bulletin. The webcast will be available for registration in early 2024.
Moreover, the bulletins published throughout the year might be interesting for you too (see links above) or follow us on LinkedIn for more upcoming alerts and events.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Natalia Graf
Director
natalia.graf@vialto.com
Franziska Tschirky
Senior Manager
franiska.tschirky@vialto.com
Further information on Vialto Partners can be found here:www.vialtopartners.com