• Carsten Reineke

Cross Border Commuters between Germany and Switzerland

Aktualisiert: 12. Dez 2018


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Taxation

According to the double taxation treaty (DTT) between Germany and Switzerland, cross border commuters are employees who live in Germany, work in Switzerland and regularly return to their place of residence in Germany on a daily basis. As a tax consequence, the income of the cross border commuters is taxed in Germany. In Switzerland, only a withholding tax of (maximum) 4.5% is deducted, which can be offset against the German tax (Article 15a DTT).

The commuter status for tax purposes ceases if, if the employee does not return to his place of residence for more than 60 days per calendar year because of his employment.

The non return is caused by the employment, if it is not possible or reasonable to return to the place of residence after work.

As a result , the employee's income is taxed where he works (place of employment), e.g. the salary of a German employee who works exclusively in Switzerland (for a Swiss employer) is taxed in Switzerland.


Forms:

Certificate of residency

In this form, the German tax office confirms to the cantonal tax office that the employee is resident in Germany and is taxed. The cantonal tax office then confirms for the employer in Switzerland that the tax deduction must be made only with the reduced withholding tax rate of maximum 4.5% (vice versa for cross-border commuters from Switzerland to Germany).


Form of work cross-border commuter

The information in this form is used to calculate the tax prepayments, which are determined by the competent German tax office by tax assessment notice. Since the Swiss employer does not pay income tax in Germany, the income tax is levied during the year through advance payments.


Form for proof of non-return days (attachment NGre-3)

In this form, the employee can prove the so-called non-return days. If the worker does not return to his place of residence for more than 60 days per year, the cross-border commuter regulations no longer have to be applied. The taxing right then has the activity state (eg exclusive activity in Switzerland, Switzerland).

The employer confirms the information given by the employee, then the cantonal tax office confirms the form (this serves to ensure that the cantonal tax office knows that Switzerland has the right of taxation).


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