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Under certain conditions and based on a multilateral agreement, it will from 1 July 2023 be easier for employers domiciled in Switzerland to allow employees domiciled in certain EU/EFTA countries to work from home to a greater extent, without this leading to a change of the applicable social security scheme. In particular, it will be possible for cross-border commuters from Germany, Austria and Liechtenstein to work outside Switzerland for up to 49.9% of their working time without this having any effect on their social security status in Switzerland. However, the agreement still has to be signed by the participating countries.
Based on the currently applicable social security agreement in the relationship between Switzerland/EU and Switzerland/EFTA (Regulation 883/2004 and Regulation 987/2009), it has been possible up to now to a limited extent only for employers domiciled in Switzerland to grant employees domiciled abroad, in particular cross-border commuters, to perform work in home office from their foreign domicile without this leading to a reclassification of the applicable social security scheme. Under the applicable social security agreement, an activity in the country of residence is in such constellations in principle only possible to the extent of less than 25% in order to remain subject to Swiss social security (subject to compliance with further requirements).
Liberalisation due to the Covid-19 crisis
Due to the restrictions related to the coronavirus, the subordination rules have been effectively lifted since the beginning of the pandemic and a flexible application of the EU social security subordination rules under the Free Movement Agreement and the EFTA convention applied until 30 June 2022. This flexible application of the subordination rules was ultimately extended until 30 June 2023.
In concrete terms, this meant that cross-border commuters working from home, for example, would continue to be subject to Swiss social security scheme even if they carried out their work in the form of home office at their domicile in the EU/EFTA. This applied regardless of the amount of work performed in home office in the country of residence.
New multilateral agreement brings facilitation even after 1 July 2023
After this transitional period expires on 30 June 2023, the ordinary subordination rules of the aforementioned social security agreement will in principle apply again as of 1 July 2023. Working in the home office in the country of residence to the extent of 25% and more would thus in principle lead to a change of the applicable social security scheme and to the application of a foreign social security law.
However, Switzerland and certain EU and EFTA countries will sign a multilateral agreement that will contain different rules in the area of social security. The aim is that home office at the foreign domicile of the employee should continue to be possible in an easier way under certain conditions even after 30 June 2023, without a change of the applicable social security scheme. Specifically, according to the agreement, it should be possible to work up to 49.9% of the working hours remotely in the country of residence without any change regarding the applicable social security scheme (here you’ll find a link to the text of the agreement with an explanatory memorandum in English).
Of Switzerland’s neighbouring countries, Germany, Austria and Liechtenstein have so far expressed their intention to sign this new agreement. Further information on the agreement can be found here.
In any case, it is important to note that the agreement relates exclusively to social security law. Any tax implications of working in home office abroad must therefore be examined separately.
