AUTOMATIC EXCHANGE OF INFORMATION ON CRYPTO ASSETS (CARF) AND ADJUSTMENTS TO THE COMMON REPORTING STANDARDS (CRS)

As of 1 January 2026, Switzerland has established the domestic legal framework for the implementation of the automatic exchange of information on crypto assets. To this end, the Federal Act and Ordinance on the International Automatic Exchange of Information in Tax Matters (AEOIA / AEOI Ordinance) were amended. The new reporting framework is based on the OECD’s Crypto-Asset Reporting Framework (CARF).

The international treaty basis [1] has not yet been ratified. The National Council’s Economic Affairs Committee (WAK-N) suspended discussions in November 2025, mainly due to delayed implementation in key markets and unresolved interpretive issues at the OECD level. Parliamentary consideration is expected to resume in 2026. If approved, information exchange could begin on 1 January 2027, with the first data exchange likely occurring in 2028.

In parallel, adjustments to the OECD Common Reporting Standard (CRS) have been decided, particularly concerning:

• inclusion of digital payment instruments,
• expansion of reportable assets to include hybrid and tokenized instruments,
• clarifications on due diligence obligations and technical harmonisation.

The Swiss Federal Council has decided that the CRS amendments relating to crypto assets will also apply only from 2027.

Further information can be found at this LINK

INTERNATIONAL AUTOMATIC EXCHANGE OF SALARY DATA

Double taxation agreements (DTAs) or related supplementary agreements with Italy and France contain special rules on taxation of cross-border workers and teleworking. These rules are complemented by an automatic exchange of salary data.

Implementing the automatic exchange of information requires new legal provisions under Swiss law. The Federal Act on the International Automatic Exchange of Information on Salary Data (AIALG) provides the necessary domestic legal basis. The Act specifically regulates:

• employer reporting obligations,
• responsibilities of Cantonal Tax Authorities and the Swiss Federal Tax Administration (SFTA),
• data protection and procedural matters.

The referendum period for the AIALG expired unused on 15 January 2026. The Act is expected to come into force no earlier than 1 May 2026.

Under this LINK you will find further information on this topic.

TRANSPARENCY REGISTER AND AMENDMENTS TO THE ANTI-MONEY LAUNDERING ACT

The new Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners (LETA) aims to increase transparency of corporate structures in Switzerland and to more effectively combat the misuse of legal entities. In the future, legal entities must not only identify their beneficial owners but also report them to a federal transparency register. The transparency register is, in principle, not publicly accessible.

A beneficial owner is a natural person who directly or indirectly, alone or with others, controls a company. Control through ownership exists, in particular, when a person holds at least 25% of the capital or voting rights. Control by other means exists when a person can exert a significant legal or factual influence over the company. Reporting obligations also apply to certain foreign companies with a connection to Switzerland.

The purpose of the transparency register is to provide law enforcement and administrative authorities with targeted access to reliable information, to more effectively combat money laundering, asset concealment, corruption, tax fraud, and tax evasion. Notably, the SFTA and cantonal tax authorities will also have access to the register. In particular, in residence and tax domicile procedures, the new transparency is expected to reduce the information asymmetry between taxpayers and tax authorities.

In parallel, the scope of the Anti-Money Laundering Act (AMLA) is being expanded. In the future, certain advisers – in addition to financial intermediaries – will also be subject to AMLA’s due diligence and reporting obligations. This includes, in particular, individuals professionally involved in real estate transactions or in the structuring of non-operational legal entities.

The referendum period for the LETA and the AMLA amendments expired unused on 15 January 2026. The corresponding legislative and regulatory provisions are expected to come into force in the second half of the year 2026.

Under this LINK you will find more information.

GLOBE INFORMATION RETURN (GIR) AND INTERNATIONAL INFORMATION EXCHANGE

In the context of the OECD minimum taxation rules (Pillar 2), the GloBE Information Return (GIR) has been introduced in Switzerland. To avoid multiple filings, an international agreement allows the automatic exchange of this information between countries.

As of 1 January 2026, corresponding ordinance amendments came into effect. They specifically regulate:

• submission procedures with the SFTA ,
• international exchange of information,
• the use of data by cantonal authorities.

Additionally, on 16 December 2025 the Council of States approved the multilateral agreement on the exchange of GloBE information. Entry into force is expected no earlier than 1 July 2026.

Further information can be found at this LINK

EXTENSION OF THE LOSS CARRYFORWARD PERIOD FROM 7 TO 10 YEARS, EXPECTED FROM 2028

On 19 December 2025, Parliament passed the Federal Act on the Extension of the Loss Carryforward Period. This legislative amendment extends the previous loss carryforward period for self-employed individuals and legal entities from 7 to 10 years. The new rules apply to federal direct tax as well as cantonal and municipal taxes.

The extended carryforward period applies to tax losses arising from the 2020 tax period onwards. Losses from earlier periods remain subject to the previous 7-year carryforward period.

Since losses are generally verified at the time of their utilisation, it is advisable to retain relevant business documents and accounting records until the assessment of the tax period in which the loss is applied becomes final. Due to the newly provided 10-year carryforward period, it may occur that, at the time of offsetting, the statutory minimum retention period for accounting records has already expired. Voluntary extended retention is therefore recommended.

The referendum period lasts until 17 April 2026. Entry into force is expected on 1 January 2028, provided no referendum is called.

CONCLUSION

The tax changes in 2026 represent another step towards greater transparency and international coordination. Companies, financial intermediaries, and advisers face expanded reporting, due diligence, and compliance obligations. Early engagement with the new rules is crucial to limit legal risks and administrative burdens.

[1] Addendum to the Multilateral Competent Authority Agreement on the Automatic Exchange of Information on Financial Accounts and to the Multilateral Competent Authority Agreement on the Automatic Exchange of Information under the Crypto-Asset Reporting Framework.

WHEN DOES A HOME OFFICE CONSTITUTE A PERMANENT ESTABLISHMENT?

The starting point is the unchanged definition of a permanent establishment under Article 5 of the OECD Model Tax Convention. Accordingly, a permanent establishment exists where the business of an enterprise is wholly or partly carried on through a fixed place of business over which the enterprise can legally or factually dispose. The key question is now under which circumstances a home office or another relevant place where activities are performed can qualify as such a fixed place of business.

To answer this question, the Updated Commentary to the OECD Model Tax Convention relies on three cumulative elements:

• the existence of a fixed place of business;
• the predominant use of that fixed place of business; and
• the performance of the activity for “commercial reasons”.

Fixed place of business

A home office permanent establishment first requires the existence of a fixed place of business over which – as mentioned – the enterprise can legally or factually dispose. The decisive element is the criterion of “fixed”. While the activity does not need to be carried out continuously, it must display a certain degree of permanence and regularity. Using a home office or another relevant place for a short period of time does not constitute a fixed place of business. The assessment may be different, however, where the same location is used regularly and repeatedly over a longer period of time.

Predominant use of the fixed place of business (50% threshold)

Where a fixed place of business exists, it must next be examined whether this place can be attributed to the enterprise. In this respect, the OECD has introduced a quantitative threshold in the updated Commentary. The decisive factor is whether, within a relevant twelve-month period, the employee performs less than 50%, or at least 50% or more, of their total working time from the home office or another relevant place.

• If the working time spent at the home office or another relevant place amounts to less than 50%, there is, in principle, no fixed place of business attributable to the enterprise.
• If the working time spent at the home office or another relevant place amounts to at least 50% of the total working time, a permanent establishment is to be assumed, provided that there are additional business reasons for performing the activity in the relevant state.
• Where the business activities of an enterprise are carried out predominantly or exclusively by a single individual, the 50% threshold generally does not apply. In such cases, a permanent establishment may be assumed even if the remotely performed working time amounts to less than 50%.

With regard to Swiss domestic law, reference should be made in this context to the analysis of the Swiss Tax Conference (STC) on teleworking. The STC acknowledges the possibility that a home office may, in principle, qualify as a fixed place of business. However, it denies the attribution of such a place to the enterprise due to the absence of the employer’s right of disposal over the concerned premises. Furthermore, the STC takes the view that the activity of a single employee – even on a full-time basis – does not constitute a quantitatively significant part of the enterprise’s overall activity, and that a home office therefore cannot give rise to a permanent establishment for this reason either. This position, however, primarily concerns purely domestic situations.

«Commercial reasons»

As mentioned above, where activities are predominantly carried out outside the employer’s premises – and outside its state of residence – it must be examined whether the activity in the home office or another relevant place is performed for business reasons. According to the OECD, such a reason exists where the physical presence of the individual in the relevant state facilitates the business of the enterprise. This is assumed to be the case where people or resources are located in the state in which the home office or remote-work activity is carried out, to which the enterprise requires access, without maintaining its own presence in that state. 

The OECD lists, in particular, the following examples as commercial reasons:

• meetings with customers of the enterprise and the development of a new customer base or the identification of business opportunities;
• identification of new suppliers, maintenance of relationships with suppliers, or the conclusion, supervision or administration of contractual arrangements with suppliers;
• access to business-relevant expertise used in the performance of the enterprise’s activities, such as regular meetings with university staff conducting research relevant to the enterprise’s business;
• the provision of services to customers or clients in the other state, where such services require the physical presence of employees or other personnel of the enterprise in that state (e.g. training or repair services performed on the customer’s premises);
• real-time or near real-time interaction with customers or suppliers in different time zones;
• substitution for business infrastructure that the enterprise would otherwise need to maintain if it were not able to operate through the home office or another relevant place.

By contrast, the mere fact that customers or suppliers are located in the state of the home office is not sufficient. Likewise, remote-work models that serve exclusively employee retention or cost-saving purposes do not, in the OECD’s view, generally constitute business reasons, as they do not facilitate the enterprise’s business activity. Finally, the existing exception for preparatory or auxiliary activities under Article 5 para. 4 of the OECD Model Tax Convention remains applicable.

Expected impact of the OECD update

The update of the OECD Commentary on Article 5 of the OECD Model Tax Convention does not entail a fundamental redefinition of the permanent establishment concept. Rather, it primarily serves to clarify and systematize existing principles in light of modern working arrangements. In particular, it aims to prevent cross-border home office activities from leading to the creation of so-called “micro permanent establishments” solely on the basis of formal criteria or minor connecting factors.

From a Swiss perspective, it should first be noted that the position taken by the STC with respect to the domestic permanent establishment concept is not directly affected by the OECD update. Currently it is not expected that home office activities in purely domestic situations will more frequently be classified as permanent establishments in the future. Nevertheless, it remains to be seen whether, and to what extent, the STC will review or refine its existing analysis in light of the updated OECD guidance. In this regard, it should be noted that the Austrian Ministry of Finance adopted the OECD position in an information notice dated 4 January 2026, resulting in a restriction of the permanent establishment concept as of 1 January 2026.

In a cross-border context, however, the OECD Commentary continues to be of considerable importance as an interpretative aid for double taxation agreements (DTAs). For newly concluded or future DTAs, it can be assumed that the updated Commentaries will be taken into account when interpreting the permanent establishment concept. With respect to existing DTAs, the relevance of the updated Commentary depends on whether the contracting states follow a dynamic or a static interpretation of the agreement. From a Swiss perspective, the Federal Supreme Court has repeatedly held that a dynamic interpretation may be permissible, particularly with regard to concepts whose understanding is subject to changes in economic and social conditions. In this context, the permanent establishment concept could be regarded as concept to be interpreted dynamically.

CONCLUSION

With the updated Commentary on Article 5 of the OECD Model Tax Convention, the OECD provides greater structure and clarity for the assessment of home office arrangements. The decisive criteria – fixed place of business, predominant use and business reasons – are now systematically set out.

Nevertheless, home office and remote-work arrangements in a cross-border environment continue to require careful analysis. Despite the guidance provided in the OECD Commentary, the assessment remains highly case-specific and requires an overall evaluation of the factual circumstances, including the organizational integration of the activity, the functional role of the individual concerned and the reasons for performing the activity in the respective state.

Finally, it should be kept in mind that the assumption of a home office permanent establishment may also have implications for transfer pricing. If a permanent establishment is recognized, the question arises as to which functions, risks and assets are to be attributed to it and which portion of the enterprise’s profits is taxable in the state where the activities are performed. Against this background, it is advisable to incorporate the findings of the OECD update into existing functional and risk analyses as well as into transfer pricing documentation.

SWITZERLAND AS AN ATTRACTIVE COUNTRY OF RESIDENCE

Switzerland has long been a preferred country of residence for internationally mobile, high-net-worth individuals. In addition to political stability, a high quality of life, and legal certainty, Switzerland offers a tax environment that is highly competitive by international standards.

One particularly distinctive feature is the so-called lump-sum taxation regime (also referred to as expenditure-based taxation). It allows certain foreign nationals to calculate their Swiss tax liability not on the basis of their worldwide income and assets, but according to their cost of living in Switzerland and abroad. Lump-sum taxation is regularly the subject of public debate; nonetheless, it remains an important element of Switzerland’s tax landscape and plays a significant role, in particular, in the context of international changes of domicile.

This article provides an overview of the eligibility requirements, the mechanics of the system, and its key advantages and limitations.

WHAT IS LUMP-SUM TAXATION?

Lump-sum taxation is a special tax regime available to foreign nationals who transfer their tax domicile to Switzerland and do not pursue any gainful employment in the country. Unlike the ordinary tax regime, worldwide income and assets are not subject to tax. Instead, the taxable base is determined by reference to the individual’s personal cost of living.

Contrary to a common misconception, lump-sum taxation does not result in a fixed tax amount. Rather, a taxable base is first established through negotiations with the tax authorities (known as a tax ruling request). Ordinary cantonal income tax rates are then applied to this base. The tax burden is therefore indirectly linked to the taxpayer’s standard of living, rather than to their actual net worth or worldwide income.

WHO IS ELIGIBLE FOR LUMP-SUM TAXATION?

The eligibility criteria are largely harmonised at the federal and cantonal levels. In principle, lump-sum taxation is available to individuals who:

• do not hold Swiss citizenship;
• are establishing or re-establishing their tax domicile in Switzerland for the first time, or after a prolonged absence; and
• do not engage in any gainful employment in Switzerland.

The prohibition on gainful employment in Switzerland is the most important condition in practice. Individuals who are operationally active in Switzerland, manage a business, or are employed there are generally not eligible for lump-sum taxation.

However, managing one’s own assets and holding equity stakes as a private investor are permissible. In certain circumstances, serving as a non-executive board member may also be acceptable. A thorough analysis of the planned activities in Switzerland is therefore essential prior to relocation.

TAXABLE BASE

The taxable base corresponds to the highest of several statutory reference amounts.

The key reference values include:

• the actual living expenses of the taxpayer and their family;
• a multiple of the annual rental costs or imputed rental value of the Swiss residence;
• the statutory minimum amounts set at the federal and cantonal levels.

For direct federal tax purposes, the minimum taxable base is currently approximately CHF 435,000. Many cantons apply their own, often higher, minimum thresholds.

Once the taxable base has been established, ordinary income tax rates apply. There is therefore no special “lump-sum tax rate”. In addition, a so-called control calculation is carried out to ensure that certain income items with a Swiss nexus, as well as income for which double tax treaty relief is claimed, are not taxed at a lower rate than would apply under the ordinary regime.

Comparison with the Ordinary Tax Regime

Under the ordinary tax regime, individuals are generally subject to tax on their worldwide income and worldwide assets. This includes dividends, interest, rental income, investment returns, and other income from Swiss and foreign sources. In addition, cantons levy a wealth tax on worldwide net assets.

Under lump-sum taxation, by contrast, the focus is on the cost of living. This can result in a significantly lower tax burden for very wealthy individuals compared with the ordinary regime.

Beyond the potential tax savings, many internationally mobile individuals value the enhanced predictability of their tax exposure.

ILLUSTRATIVE EXAMPLE

A foreign entrepreneur or investor relocates to Switzerland. They hold assets of CHF 100 million and derive their income primarily from international equity investments and capital assets. Agreed dividends, interest, and similar returns amount to CHF 6 million per annum.

In Switzerland, the individual does not pursue any gainful employment and therefore meets the eligibility requirements for lump-sum taxation.

Ordinary Taxation

Under the ordinary tax regime, worldwide income of CHF 6 million and worldwide assets of CHF 100 million would be subject to Swiss tax. For the investor, only limited deductions would generally be available in the annual tax return.

Private capital gains in Switzerland are in principle tax-exempt. However, all relevant income and asset values must be declared annually.

Lump-Sum Taxation

Assuming an agreed expenditure base of CHF 1.5 million per annum, tax is calculated not on the actual investment income of CHF 6 million but on the agreed expenditure base of CHF 1.5 million.

For wealth tax purposes, 20 times the annual income taxable base serves as the statutory minimum taxable base — in this example, the wealth tax base would accordingly be set at CHF 30 million instead of CHF 100 million.

This example illustrates the key advantage of lump-sum taxation: the tax burden is primarily driven by lifestyle costs rather than total worldwide assets. The actual tax saving always depends on individual circumstances, the canton of residence, and the taxpayer’s international tax profile. In addition to the planning certainty it offers, the annual tax compliance burden under lump-sum taxation is considerably less extensive than under the ordinary regime — a factor that can generate meaningful cost savings.

WHICH CANTONS OFFER LUMP-SUM TAXATION?

The majority of Swiss cantons continue to offer lump-sum taxation. It has been abolished in Zurich, Basel-City, Schaffhausen, and Appenzell Ausserrhoden.

Several cantons have well-established practices and are regarded as particularly experienced in dealing with internationally mobile private clients. Key locations include, among others:

Zug ZG – Baar, Zug Stadt, Cham.

Schwyz SZ – Wollerau, Freienbach, Feusisberg.

Nidwalden / Obwalden – Hergiswil NW, Stansstad NW, Engelberg OW

Graubünden GR – St. Moritz, Pontresina, Silvaplana, Zuoz.

Vaud VD – Montreux, Lausanne, Nyon

Bern BE – Gstaad / Saanen

Geneva GE – Genf Stadt, Cologny.

Ticino TI – Lugano, Ascona, Locarno, Paradiso, Collina d’Oro.

The attractiveness of lump-sum taxation depends significantly on the chosen canton of residence. In addition to tax rates, key factors include the minimum taxable base thresholds and the administrative practice of the cantonal authorities.

In practice, the minimum thresholds are frequently exceeded. The actual taxable base is determined by the individual’s specific cost of living, the type of residential property, and the outcome of negotiations with the competent tax authorities.

CONCLUSION

Lump-sum taxation remains a significant feature of Switzerland’s tax landscape and offers qualifying foreign nationals an attractive alternative to the ordinary tax regime. For wealthy individuals with an international background, the system can provide a compelling combination of tax planning certainty, legal security, and high quality of life.

At the same time, lump-sum taxation is not an unconditional tax saving arrangement. The prohibition on any form of gainful employment in Switzerland is the central requirement - and the one most frequently scrutinized in practice. Moreover, depending on the individual’s nationality, asset structure, and existing foreign tax obligations, complex cross-border tax issues may arise that make a comprehensive international tax analysis prior to relocating to Switzerland indispensable.

The actual attractiveness of lump-sum taxation ultimately depends on a wide range of individual factors — including asset structure, income sources, canton of residence, family circumstances, and planned activities in Switzerland. Early-stage planning and close coordination with the competent tax authorities therefore remain key success factors. Whether lump-sum taxation represents the optimal solution in any given case can only be assessed based on a thorough, individualized analysis.

INTERNATIONAL EXCHANGE OF INFORMATION FOR CRYPTOASSETS

In fall 2022, the OECD presented an automatic exchange of information ("AEOI") specifically for digital assets, the so-called Crypto Asset Reporting Framework ("CARF"). In November 2023, around 50 countries, including Switzerland, agreed to extend the AEOI to digital assets and the CARF. The CARF is intended to close existing gaps in the tax transparency regime and eliminate the different treatment of "traditional" financial products and crypto products. It is planned to enact the crypto AEOI on January 1, 2026, so that the first data exchange on the basis of the CARF can take place in 2027. To this end, the international legal basis must first be approved by Parliament and the existing Federal Act and the AEOI must be amended accordingly. At the same time, various recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes regarding the already existing AEOI will also be implemented. In this regard, the Federal Council opened the consultation process on 15 May 2024 (see here).

The AEOI for cryptocurrencies follows the same system as the AEOI for financial accounts. It provides for the automatic and regular exchange of information on transactions involving cryptocurrencies. The information to be exchanged is to be collected by the providers of crypto services subject to the reporting obligation and transmitted to the Swiss Federal Tax Administration (“SFTA”) once a year. The information to be exchanged and the qualification as a reportable provider of crypto services are regulated as follows in the multilateral agreement on the crypto AEOI and in the DTA.

Who: Legal entities and natural persons are subject to the CARF reporting obligations, if they provide services for or on behalf of their customers in the form of exchange transactions between various relevant cryptocurrencies and between relevant cryptocurrencies and fiat currencies. As such services also qualify the providing trading platforms or by assuming the role of a counterparty or an intermediary in the aforementioned exchange transactions.

About whom: Reportable users within the meaning of the CARF are natural persons and legal entities (including trusts and foundations) that are clients of a reportable provider of crypto services and are not exempt from the reporting obligation. The beneficial owners of the cryptocurrencies in question are also deemed to be reportable clients. The purpose of recording the beneficial owners is to prevent circumvention of the AEOI.

What: The reports must generally contain information on the identity of the person subject to the reporting obligation (name, address, date of birth, tax residency, tax identification number, etc.) and on the transactions carried out (type of cryptoasset, total gross amount, total number of units, number of transactions, staking and lending fees etc.). The information on the provider of the crypto services concerned subject to the reporting obligation must also be provided.

How: In order to identify the reportable users of cryptocurrencies, determine the countries relevant for tax reporting and obtain the necessary information, the CARF contains diligence obligations for the reportable providers of crypto services. The intentional breach of these diligence obligations and other obligations under the AEOI can be punished with fines of up to CHF 250,000. In the event of negligence, the fine is up to CHF 100,000.

Potentially reportable providers of crypto services are recommended to check as early as possible whether they or their services fall within the scope of the Crypto AEOI and - if a reporting obligation exists - to implement appropriate processes to ensure reporting.

INTERNATIONAL AUTOMATIC EXCHANGE OF SALARX DATA 

On June 7, 2024, the Federal Council opened the consultation on a new federal law on the automatic exchange of salary data (see here). The draft of this law is based on the agreements that Switzerland was able to conclude with Italy and France to create new rules for the taxation of cross-border commuters (Italy) and the taxation of teleworking (France).

On 23 December 2020, Switzerland was able to conclude a new "cross-border commuter agreement" with Italy. This agreement entered into force on July 17, 2023 and has been applicable since January 1, 2024. In addition to the redefinition of the term "cross-border commuter" and the new allocation rules for taxable income, the agreement provides for the automatic exchange of information on salary data under the title of "Administrative cooperation". According to the new cross-border commuter agreement, persons are deemed to be cross-border commuters if they

• are resident for tax purposes in a municipality whose territory lies wholly or partly within a 20 km border zone of the other contracting state,
• are gainfully employed in the border area of the other contracting state for an employer based there or for a permanent establishment or fixed base located there and
• return to their tax domicile in their country of residence on a daily basis.

Under the new agreement, “new” cross-border commuters who are resident in the Italian border region and are gainfully employed by an employer based in the Swiss border region or have a corresponding permanent establishment will be subject to ordinary taxation in Italy. However, Switzerland may tax the income at 80% of the withholding tax, whereby Italy credits this tax to avoid double taxation. Existing cross-border commuters, i.e. those who already qualified as cross-border commuters between December 31, 2018 and July 17, 2023 and are still considered cross-border commuters under the new agreement, will continue to be taxed exclusively in Switzerland. The cantons of Grisons, Ticino and Valais are obliged to pay 40% of this tax revenue to the Italian border communes until December 31, 2033.

In order to ensure the correct taxation of new cross-border commuters, the cross-border commuter agreement provides for the automatic exchange of salary data. For employers in the cantons of Grisons, Ticino and Valais, this means that they must report salary data and other information on the person concerned for all cross-border commuters resident in Italy to the cantonal tax authorities for the first time at the beginning of 2025 for the 2024 calendar year. The tax authorities of the cantons of Grisons, Ticino and Valais will then be responsible for forwarding the information.

In relation to France a supplementary agreement to the existing double taxation agreement was concluded on June 27, 2023, which was adopted by Parliament on June 14, 2024 (see hier). With this supplementary agreement, the tax attribution standards for teleworking previously regulated in various mutual agreements will be transferred to the DTA and the protocol to it. The new regulation stipulates that 40% of the working time per calendar year can be performed in the form of teleworking without the employee's country of residence having the right to tax the wages paid. This regulation applies to the whole of Switzerland, with the exception of cross-border commuters who work in the cantons of Basel-Landschaft, Basel-Stadt, Bern, Jura, Neuchâtel, Solothurn, Vaud and Valais. Although the same tolerance of 40% applies to them, they are technically not covered by the DTA.

The employer's state pays the other state compensation amounting to 40% of the tax owed for work performed in the form of teleworking. However, a special rule applies to employers in the canton of Geneva: Here an exemption limit of 15% of the working days for which no compensation payment has been established. In other words, a compensatory payment is only due for teleworking days that account for between 15% and 40% of working time. This provision was included in the agreement since Geneva must continue to pay the departments of Ain and Haute-Sovoie a compensation payment amounting to 3.5% of the gross salary of cross-border workers employed in Geneva. France did not want to waive this payment for domestic political reasons.

It is obvious that monitoring compliance with the aforementioned regulations requires detailed and reliable information on the activities and remuneration of the persons concerned. France has therefore expressed the wish for many years to compare the salary amounts reported by Switzerland with the income declared in France by cross-border commuters. With the supplementary agreement of June 27, 2024, an automatic exchange of information for salary data has now been included. In addition to the personal details of the persons concerned, the following information must be transmitted: Calendar year in which the income was earned; number of teleworking days or teleworking rate in percent; total amount of gross remuneration paid. The introduction of the exchange of information is planned for the beginning of 2026, which means that employers in all Swiss cantons will have to submit information to the competent tax authorities for the first time at the beginning of 2026 for the calendar year 2025 for all employees residing in France. In contrast to the exchange of information with Italy, salary data will be reported to France via the SFTA.

As the international automatic exchange of salary data is being introduced for the first time, the Federal Council intends to create the necessary legal basis for this in a new federal law, the Federal Act on the International Automatic Exchange of Information on Salary Data. In addition to the procedure, responsibilities and confidentiality obligations, the new law also covers the rights of employees. In particular, they have a right to information about the information concerning them and to be transmitted, as well as the rights arising from the Data Protection Act. Finally, the penal provisions should also be emphasized for employers. Negligent or intentional violation of the obligation to provide information that must be reported and violation of the obligation to provide information to employees can be penalized with a fine of up to CHF 1,000. In serious cases or in the event of recidivism, the fine can be set at up to CHF 10,000.

CONCLUSION

As shown above, the expansion of the international automatic exchange of information to include crypto and salary data also entails corresponding obligations for information holders, i.e. crypto service providers and employers. It is advisable - not least with regard to the criminal provisions - to check at an early stage whether and to what extent the described extensions are relevant for your own company and, if necessary, to set up appropriate processes to ensure the timely and correct provision of the data to be transmitted. It remains to be seen whether and when the automatic exchange of wage data will also be introduced in relation to Germany and Austria.

VAT AND

We would like to take this opportunity to remind you that at the end of 2022, the Swiss people ap-proved an increase in VAT rates with effect from January 1, 2024. The background to the increase is the financing of the “AHV” (“Alters- und Hinterlassenenversicherung”, “Old-age and survivors' insur-ance”).

As a result, the following VAT rates will apply from January 1, 2024:

We would like to take this opportunity to remind you that at the end of 2022, the Swiss people ap-proved an increase in VAT rates with effect from January 1, 2024. The background to the increase is the financing of the “AHV” (“Alters- und Hinterlassenenversicherung”, “Old-age and survivors' insur-ance”) place of work principle, according to which the country of employment can tax income from employment if the work is actually physically performed in that country. If certain working days in cross-border employment relationships are no longer physically performed at the employer's registered office in the country of activity, but in the home office in the country of residence, this can lead to a different allocation of the right to tax salaries.

For the example of an an international weekly resident with residence and family domicile abroad and place of work in Switzerland, this means that Switzerland may tax the Swiss working days based on the place of work principle. However, each individual working day performed in the home office at the foreign place of residence is subject to tax abroad and must be exempt from tax in Switzerland accordingly. If the home office activity abroad reaches a certain level, it must be examined whether the foreign country of residence has the exclusive right to tax the employment income as a result of the application of the so-called "assembler's clause" in accordance with Art. 15 para. 2 of the respective DTA. This special provision applies if the employee spends a total of less than 183 calendar days in Switzerland (working days including weekends and holidays) and the remuneration is not paid by an employer in Switzerland or a permanent establishment of the foreign employer located there. If the conditions are met cumulatively, Switzerland loses its right of taxation as the place of work.

Another exception to taxation at the place of work can be found in the taxation of international weekly residentFor example, a new consultation agreement on the application of Art. 15 para. 4 DTA Germany was concluded with Germany on 6 April 2023. According to this agreement, the provisions of this article will also apply to "senior executives" with residence and family domicile abroad and place of work in Switzerland, this means that Switzerland may tax the Swiss working days based on the place of work principle. However, each individual working day performed in the home office at the foreign place of residence is subject to tax abroad and must be exempt from tax in Switzerland accordingly. If the home office activity abroad reaches a certain level, it must be examined whether the foreign country of residence has the exclusive right to tax the employment income as a result of the application of the so-called "assembler's clause" in accordance with Art. 15 para. 2 of the respective DTA. This special provision applies if the employee spends a total of less than 183 calendar days in Switzerland (working days including weekends and holidays) and the remuneration is not paid by an employer in Switzerland or a permanent establishment of the foreign employer located there. If the conditions are met cumulatively, Switzerland loses its right of taxation as the place of work.

So far New Standard rate 7.70% 8.10% Reduced rate 2.50% 2.60% Special rate for accommodation services 3.70% 3.80% of cross-border commuters. As in the area of social security, various special consultation agreements and regulations with countries bordering Switzerland had to be observed from a tax perspective due to the COVID-19 pandemic until recently. Although these have since ceased to apply, the increase in home office work as a result of the pandemic has provided an important impetus. Against this backdrop and the fact that employees increasingly want to work from their place of residence, various new regulations have recently been concluded with neighboring countries in the area of taxation of cross-border commuters.

Individual taxes in regards Direct Federal Tax There will be no significant changes to taxes for private individuals in 2024. Various deductions will be adjusted slightly upwards due to inflation:

Higher interest on arrears and remuneration Anyone who pays direct federal tax in advance will now receive a refund interest rate of 1.25% (2023: 0%). However, anyone who misses the payment deadline must now pay 4.75% interest on arrears (2023: 4%).

Introduction of equalization and compensation interest at cantonal and municipal tax level We would also like to draw your attention to the fact that certain cantons are reintroducing equaliza-tion interest as of 2024. For example, the canton of Zug is introducing equalization interest of 2%. In principle, this interest will apply to all outstanding amounts against the respective tax administration as at 1.1.2024. The right to establish deviating rules at the different cantonal levels is reserved. We therefore recommend that you contact your tax authority to clarify your situation with regard to any unpaid tax debts as at 1.1.2024. Both individuals and legal entities are affected by equalization interest. Due to the renewed introduction of equalization interest, the cantons will introduce compensatory interest as a counterpart.

Changes in the canton of Zurich Since 2016, the canton of Zurich has dropped a total of 13 places in terms of profit tax rates com-pared to other cantons. Current tax burden data shows that the canton of Zurich now has the highest ordinary profit and capital tax burdens in the country. In response to this, the Department of Finance has taken measures to make the canton more attractive again. The plan is to ease the burden on companies slightly, while shareholders will be asked to pay more. Specifically, a reduction in the sim-ple profit tax rate from 7 to 6 percent is planned. This would reduce the overall tax burden from 19.7% to 18.2% (direct federal tax, state and municipal taxes in the city of Zurich, calculated on pre-tax prof-it). In addition, the taxation of dividends from qualified participations is to be increased from 50% to 60%. Although these changes are planned, their implementation is not scheduled until 2025.

Until the outbreak of the COVID-19 pandemic resp. the lockdown on 11 March 2020, a workload of 25% of the total activity on average was considered to be a substantial activity. Thus, up to a maximum of 24.9% of the total activity could be performed in the home office without a change of insurance status.

Due to the special situation in connection with the coronavirus, a flexible application of the subordination regulations was agreed within the EU/EFTA and in relation to Switzerland, according to which the insurance subordination should not change due to the pandemic-related restrictions. Thus, a person is considered to be employed in the country of employment (and thus subject to the social security system there) even if he or she is physically unable to perform his or her work there and must perform 100% of the working days in the country of residence in the home office. In principle, an A1 certificate was not required in such circumstances. Within the EU/EFTA/CH-States this flexible regulation was extended until 30 June 2023.

According to the old regulation before the lockdown, in the case of a 100% workload, a home office activity of 2 days (40%) would lead to a change of social security status to the country of residence and the employer would subsequently be liable for social security contributions in the employee's country of residence and for the payment of the corresponding social security contributions. An A1 certificate confirming the applicable social security legislation would also have to be applied for. Under the flexible application regime during the COVID-19 pandemic, however, there would be no change in social security status despite performing more than 25% of substantial work in the country of residence and no need to apply for an A1 form would arise.

In order to continue a facilitation of social security subordination after 30 June 2023, Switzerland and certain EU and EFTA states have signed a multilateral agreement. The agreement provides that persons working in the state in which their employer's registered office is located may perform up to 50% cross-border telework (maximum 49.9% of working time) in the state of residence without the subordination for social insurance changing from the state of the employer's registered office to the state of residence.

In order for the agreement to apply to their employees, Swiss employers must apply for an A1 certificate (maximum validity 3 years, renewable) from their OASI compensation fund via the ALPS platform (Applicable Legislation Portal Switzerland). The same applies to foreign employers whose Swiss employees wish to work from their home office. They must apply for an A1 certificate from the competent foreign authority.

This exception is only applicable to situations involving two states that have signed the agreement. In the case of home office in a state that has not signed the multilateral framework agreement, or for an employer based in a state that has not acceded to the agreement, the ordinary rules and procedures applied before the pandemic will apply again as of 1 July 2023 (materiality threshold of 25% of the activity, need to apply for an A1 certificate). The agreement is also not applicable if, in addition to teleworking in the country of residence, the employee carries out other activities there, such as visiting customers, or has an employment relationship in another EU/EFTA state.

It should be noted that the above regulations only apply to the area of social security. The tax perspective must be examined separately and based on the respective applicable double taxation agreements, the supplementary agreements or memorandums of understanding, as well as the separate cantonal special agreements with the border states. A more in-depth discussion of the tax approach will be addressed in the next blog post. It should already be mentioned that a new mutual agreement has entered into force with France on 1 January 2023. A new cross-border commuter agreement and an amendment protocol also entered into force with Italy on 17 July 2023. In relation to Germany, the new consultation agreement of 6 April 2023 concerning "senior employees" must be taken into account.