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Old 02.07.2021, 11:53
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Swiss employment contract for EU resident

I have an EU citizen, who has an interest in taking up a job offer, BUT wants to remain a resident within his home EU country whilst working on a Swiss employment contract.

Does anyone have first-hand knowledge of whether this is possible please? The hiring company is a legal entity in Switzerland. The potential employee is in an EU country that has a double taxation agreement in place with Switzerland.

I can see the attractiveness of this in theory for the job seeker, given Swiss personal tax rates are significantly lower than his home country, but I cannot imagine any tax authorities allowing this kind of loophole to exist and missing out on tax revenues??

The job seeker is also open to receiving an employment contract instead from Germany, again where this company has a legal entity - but again, I would appreciate input from anyone who has direct knowledge of whether this is feasible?

Failing these options, I'm mindful that there are "umbrella" type companies that could cover this potential employee with a domestic employment contract in his home country, on their payroll rather than on the employer companies payroll (the employer does not have a legal entity in the EU country where the job seeker is a resident), but now we're talking silly money for fees...

Last edited by smileygreebins; 02.07.2021 at 19:41.
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Old 02.07.2021, 12:32
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Re: Swiss employment contract for EU resident

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I have an EU citizen, who has an interest in taking up a job offer, BUT wants to remain a resident within his home EU country but work on a Swiss employment contract.

Does anyone have first-hand knowledge of whether this is possible please? The hiring company is a legal entity in Switzerland. The potential employee is in an EU country that has a double taxation agreement in place with Switzerland.

I can see the attractiveness of this in theory for the job seeker, given Swiss personal tax rates are significantly lower than his home country, but I cannot imagine any tax authorities letting this kind of loophole to exist and missing out on tax revenues??

The job seeker is also open to receiving an employment contract instead from Germany, again where this company has a legal entity - but again, I would appreciate input from anyone who has direct knowledge of whether this is feasible?

Failing these options, I'm mindful that there are "umbrella" type companies that could cover this potential employee with a domestic employment contract in his home country, on their payroll rather than on the employer companies payroll (the employer does not have a legal entity in the EU country where the job seeker is a resident), but now we're talking silly money for fees...
So the candidate wants a Swiss salary to pay Swiss taxes, but live in a lower cost of living country? They are dreaming! You pay personal taxation based on where you live, not where your employment contract is.

The only way I know around this is when someone goes on an international assignment from Switzerland for a fixed period and the company agrees to equalise their taxes. This means you as the employer are paying the difference between the two tax rates.
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Old 02.07.2021, 12:35
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Re: Swiss employment contract for EU resident

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So the candidate wants a Swiss salary to pay Swiss taxes.
Actually no, it would be a lower than usual Swiss salary - paid in Swiss francs but at a level that is a direct currency conversion from the equivalent in the company's other EU legal entities....so no gaming on the salary side of things at least...
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Old 02.07.2021, 12:40
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Re: Swiss employment contract for EU resident

Depends if you're planning/expected to go into the office in Switzerland.

https://www.sem.admin.ch/sem/en/home...g_eu_efta.html

Otherwise, if it's all remote working then you'd probably have to see what's required at your end; should be possible.
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Old 02.07.2021, 12:49
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Re: Swiss employment contract for EU resident

Freelancing? I work with several freelancers around Europe and America (the continent). They send invoices, I pay, taxes are their problem.
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Old 02.07.2021, 13:31
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Re: Swiss employment contract for EU resident

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I can see the attractiveness of this in theory for the job seeker, given Swiss personal tax rates are significantly lower than his home country, but I cannot imagine any tax authorities letting this kind of loophole to exist and missing out on tax revenues??
Of course not, the tax authorities are professionals with far more experience in this area that the average taxpayer, they know all the tricks.

Liability to income tax is based on behaviour not even resident permits. The most widely know revenue practice is the 183 day rule. But that is only revenue practice, not the law. The law usually provides for other tests that they can apply if they feel the 183 day rule is being used solely for the purposes of tax avoidance. This like do you have a place of residence available to you that remains unoccupied in your absence and do you reside there when you visit the country and so on.

There are also consequences for the employer. They are being asked to falsify documents relating to the employee's status or alternatively they have a direct employee in another jurisdiction which depending on the tax laws there might make then subject to the tax laws in that state.
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Old 02.07.2021, 13:37
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Re: Swiss employment contract for EU resident

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Freelancing? I work with several freelancers around Europe and America (the continent). They send invoices, I pay, taxes are their problem.
Unless the freelancer has an independent right of residence in the state (a citizen or already have permanent residence status) this is only a short term solution. FMOP does not provide for remote workers, it assumes you are going to take up some kind of gainful employment in the state. Perhaps this will be addressed in the future.
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Old 02.07.2021, 14:57
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Re: Swiss employment contract for EU resident

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I have an EU citizen, who has an interest in taking up a job offer, BUT wants to remain a resident within his home EU country but work on a Swiss employment contract.

Does anyone have first-hand knowledge of whether this is possible please? The hiring company is a legal entity in Switzerland. The potential employee is in an EU country that has a double taxation agreement in place with Switzerland.
This HR-services site doesn't show the answers (except, presumably, for a fee), but it does have a good list of questions you should be checking (in German):
https://expateer.ch/ausland-remote-v...-hybrid-work2/
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Old 03.07.2021, 19:23
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Re: Swiss employment contract for EU resident

Well, if you cannot get the status of the cross-border commuter, then it would be probably illegal in your home country - most countries require to participate in their social security system, and to pay taxes where you normally live, otherwise you are entering a black zone (tax evasion and black work)
Also, the employer has the obligations to admit you to the systems where work is performed (i.e. in your home country), and adhere to local working regulations. There are just very few exceptions to this rule (e.g. business trips, ...), which are unlikely to fit this case. Would the employer fail, the penalties can be huge.
This is more-or-less universal across Europe, in harmonised fight against black work.
The only legal option is to be de-facto employed in the country you live (i.e. participate to the local social security and tax systems, follow local work regulations, ...) or establish some kind of business contractual scenario. I doubt that the potential employer would be interested to study local regulations in the country you live in, so look for some kind of business relation that will cover you (payroll companies, self-employment, own ltd. company employing you, ...).
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Old 04.07.2021, 15:31
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Re: Swiss employment contract for EU resident

Thanks all, I'll pass this info onto the job seeker and the hiring leader.
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