CONVINUS Global Mobility Alert - Week 13.2024
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BEST PRACTICE<br />
Social security<br />
Due to her employment in Switzerland, she is subject to social security contributions in<br />
Switzerland. For her to remain subject to social security contributions in Switzerland, she may not<br />
work more than 24.9% in Germany. The reason for this is that the new teleworking regulation<br />
(maximum 49.9% home office activity) does not apply, as she is regularly travelling. If this regular<br />
travelling activity were to cease, the teleworking regulation could be applied.<br />
From a social security perspective, a possible move to Stuttgart would also not change the<br />
assessment of the situation.<br />
Tax<br />
Due to her function, she is considered an "executive employee" from a tax perspective. However, as<br />
she commutes every day, she is also regarded as a "cross-border commuter".<br />
According to the DTA between Switzerland and Germany, the cross-border commuter rule takes<br />
precedence over the executive employee rule and therefore applies. As a result, Swiss Medical<br />
Solutions AG only has to pay tax on 4.5% of its gross income in Switzerland. Effective taxation takes<br />
place in Germany.<br />
By moving to Stuttgart, she would no longer be considered a cross-border commuter for tax<br />
purposes, meaning that her entire earned income would then be subject to Swiss taxation. The<br />
"normal" Basel withholding tax rate would apply.<br />
The position in the company harbours a very high permanent establishment risk in Germany for the<br />
Swiss company. It is therefore understandable that the HR department is opposed to this. However,<br />
it may be possible to find a solution by taking a closer look at the situation so that 1 day in the<br />
home office can be granted and the permanent establishment risk can be minimised as far as<br />
possible.<br />
CONCLUSION<br />
As can easily be seen from this practical example, it is very important to analyse the details in each<br />
case and to assess each area of law separately. This is because a different conclusion can be<br />
reached depending on which "legal lens" is used to judge a situation.<br />
8<br />
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