Taxation of cross-border commuters in Switzerland and France

guide fiscalité des frontaliers en Suisse

In their everyday lives, cross-border workers are constantly subject to Swiss and French legislation. This is the case, for example, for health insurance, family allowances, etc. Taxation is no exception. Swiss cross-border tax is actually multifaceted, as it depends greatly on the situation of the worker concerned.

As a cross-border worker, you pay tax only in Switzerland, only in France, or in both countries.

Depending on the canton of employment, the activity of the spouse, the professional situation (employee, self-employed...) and other parameters, the taxation and tax rules that apply are different for everyone.

It is therefore important to understand the tax situation in which you find yourself. The aim of this document is to shed light on the taxation of cross-border workers in order to better understand how tax works in Switzerland and France for cross-border workers.

Summary
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    Taxation of frontier workers' tax households

    When talking about cross-border workers tax in Switzerland, the first thing that needs to be determined is the tax regime to which a frontier worker is subject, i.e. in which country or countries (and possibly in which canton) the frontier taxpayer is taxed.

    The tax regime for cross-border commuters depends on several factors: the canton of work, whether the cross-border commuter is employed or self-employed, whether the spouse of the worker is employed in Switzerland or not, etc. There are many different tax situations, as well as the parameters that come into play in qualifying these situations.

    To simplify understanding, we have summarised the main cases in the following table:

    Cross-border commuter working in the canton of Geneva without French source income Geneva Geneva
    Cross-border commuter working in the canton of Geneva with a spouse working in a swiss canton where he or she is subject to withholding tax - Geneva
    - in the spouse's canton
    Swiss source income is taxed in Geneva and in the other canton
    Cross-border commuter working in the canton of Geneva with a spouse working in a canton not subject to withholding tax Geneva Swiss source income is taxed in Geneva.
    Income from other cantons is taxed in France.
    Cross-border commuter working in the canton of Geneva with French source income in the household - Geneva
    - in France
    Swiss source income is taxed in Geneva and French source income is taxed in France
    Cross-border commuter working in any Swiss canton and staying in Switzerland during the week (weekly cross-border commuter) without income from French sources in the canton of residence in the canton of residence
    Cross-border commuter working in any Swiss canton and staying in Switzerland during the week (semainier frontalier) with French source income in the household - in the canton of residence
    - in France
    Swiss source income is taxed in Switzerland and French source income is taxed in France
    Cross-border commuters working in the cantons of Bern, Solothurn, Basel-Stadt, Basel-Landschaft, Vaud, Valais, Neuchâtel and Jura - in France
    Self-employed border worker working in Switzerland without French source income - in Switzerland
    Self-employed frontier worker working in Switzerland with a spouse working in Switzerland - in Switzerland
    Cross-border pensioner receiving AHV (AVS) or BVG (LPP) pension from a private fund - in France
    Cross-border pensioner, Swiss national (or binational), receiving AHV (AVS) or BVG pension (LPP) from a public law fund in Switzerland AVS pension taxed in France (or in your country of residence)
    BVG pension (LPP) taxed in Switzerland

    Note: your situation is not listed in this table? Do you want to be sure of your tax situation? Contact our teams, we will give you more information.

    The certificate of tax residence (form 2041-AS)

    For cross-border commuters working in the cantons of Bern, Solothurn, Basel-Stadt, Basel-Landschaft, Vaud, Valais, Neuchâtel and Jura, the French government has introduced a certificate of tax residence the purpose of which is to limit tax evasion (before the introduction of this certificate, some cross-border workers did not declare their income in France, as the French tax authorities had no way of knowing that the taxpayer was employed in Switzerland).

    This is an important tax step for the frontier worker as it can potentially avoid double taxationin France and Switzerland on his income.

    This certificate of tax residence, also known as form 2041-AS, must be completed by the frontier worker's tax office, which must then forward it to his or her employer.

    A certificate of tax residence which must be submitted to the employer

    This certificate must be sent to the employer as soon as possible after the start of the professional activity, and must then be submitted to the employer every year.

    Otherwise, the cross-border worker will be taxed at source in Switzerland. In this case, the cross-border worker would thus be wrongly taxed in Switzerland and also in France, where he should normally pay tax: this is a case of double taxation from which it is then very difficult to escape without losing out.

    How to obtain the 2041-AS form?

    To obtain the 2041-AS tax residence form, go to the French tax site and type 2014-AS in the search form or consult our guide "How to complete the tax residence certificate".

    Special cases for people living in the Ain department

    For people living in the Ain department, a special procedure has been set up.

    Tax in Geneva for cross-border commuters

    In the canton of Geneva, cross-border commuters are taxed at source, directly on their wages. The employer is responsible for calculating the tax on the basis of the information provided by the cross-border worker. It is also the employer who deducts the calculated cross-border tax from the salary and transfers the amount of tax to the cantonal tax administration.

    How is withholding tax calculated?

    Withholding tax is calculated as follows:

    (gross salary + any differential family allowances paid) x tax rate

    • The tax rate is calculated on the basis of a tax scale, which depends on the personal situation of the cross-border taxpayer.
    • The source tax scale differs according to the number of children in the household, the marital status (married or single) and other parameters relating to the personal situation of the spouse.
    • Finally, this scale includes several deductions on a flat-rate basis.

    Withholding tax return form

    Form to declare tax at source

    On joining the company, the cross-border employee fills in a tax return form for withholding tax in which he must specify his family situation. This document will be used by the cantonal tax authorities to establish the withholding tax rate.

    This document must be completed and submitted to the employer whenever there is a change in personal circumstances (birth of a child, marriage or divorce, etc.)

    Withholding tax scales in Geneva

    A scale (barème A) - single without dependent children
    - cohabitants with or without dependent children
    - divorced or separated persons with children in alternating custody (but without maintenance payments)
    B scale (barème B) - married couple where the spouse is not in employment
    - married couple where the spouse has no additional income (unemployment, health or accident insurance)
    - person married to an international civil servant subject to Scale B (list provided by the cantonal tax administration)
    C Scale (Barème C) - married couple where the spouse is professionally active in Switzerland or elsewhere
    - married couple where the spouse has additional income (unemployment, health or accident insurance)
    - person married to an international civil servant subject to Schedule C (list provided by the cantonal tax administration)
    H Scale (barème H) - a person living alone (divorced, separated, widowed or single) with minor dependent children

    The rectification request

    What is a rectification?

    As the withholding tax is a tax deducted for the current year before the taxpayer's actual tax situation is fully known (which will by definition be at the end of the year), and as this tax includes in its scales flat-rate deductions, it will, for many taxpayers, be different from the tax that should actually be paid.

    Therefore, a tax adjustment makes it possible to take into account any real deductions and to apply them in the tax calculation.

    For example, a cross-border taxpayer who has bought back years of insurance for the 2nd pillar (LPP, payments to his pension fund) during the year will be able to apply a deduction.

    What deductions are possible in the context of the rectification?

    Pension fund payments, childcare costs, vocational training costs... A more complete list of deductions is available on our page "Tax adjustment".

    What are the deadlines for submitting the source tax adjustment request?

    In Geneva, the deadline for filing requests for source tax adjustments is 31 March of the current year for the previous year's income. While it is possible to request a delay for an ordinary tax return, it is very difficult to obtain one for an adjustment. The deadline of 31 March must therefore be scrupulously respected.

    The only exception: It is still possible to make an adjustment after 31 March for a married couple on scale C, as this is mandatory

    The quasi-resident tax return, to take account of actual expenses

    The Geneva cantonal tax administration (AFC) has introduced a specific tax return for cross-border workers in the canton of Geneva whose gross household income is more than 90% Swiss.This tax return is called quasi-resident tax return.

    Cross-border taxpayers who are in this situation can claim additional deductions, such as deductions for mileage, loan interest, health insurance costs, etc.

    Steps to calculate quasi-resident status

    2 steps are necessary to establish a quasi-resident tax return:

    1. ensure that the cross-border taxpayer meets the conditions for this status (more than 90% of income from Swiss sources)
    2. make a provisional tax calculation taking into account the deductions for quasi-resident.

    Quasi-resident status is not necessarily more attractive

    What is at stake here is the following calculation: are the additional deductions allowed by the quasi-resident status higher or lower than the flat-rate deductions included in the withholding tax scale for each taxpayer who applies for them?

    If these additional deductions are higher than the standard deductions, then the quasi-resident status is more attractive for the taxpayer.

    If these additional deductions are less than the standard deductions, then the quasi-resident status is less attractive for the taxpayer.

    Warning :

    1. This calculation must absolutely be made before making a request for rectification, as there would of course be no point in making a quasi-resident tax return that penalises the taxpayer for tax purposes.
    2. for the calculation of the gross income of the household on the Swiss side, it will be necessaryto add all the global income of the household, whatever the source (in particular the rental value of one's property in France if one is an owner)

    Clearly, quasi-resident status does not automatically grant a tax interest. However, if a request for rectification taking into account the quasi-resident status is filed, it must be honoured.

    Taxation of cross-border workers in France

    The French tax return is an essential and mandatory step for frontier workers living in France.
    All cross-border taxpayers who live in France are legally obliged to file a tax return in France, even if 100% of their income is from Swiss sources.

    Tax return in France for cross-border commuters

    The French tax return for cross-border commuters must be made, as for all French taxpayers, for the previous year's income.

    • you declare in year "n" your income for the previous year
    • you pay the previous year's income tax in year "n

    How is the amount of tax calculated in France?

    The purpose of the tax return procedure is to calculate the net taxable income of the household and it is this net taxable income which, multiplied by the tax rate, will give the amount of tax to be paid to the French tax authorities.

    What is taxable income in France?

    In France, a household's taxable income includes all types of income received, of which the following are the main examples:

    • Wages from France
    • Wages from Switzerland
    • Pensions
    • Maintenance payments received
    • Management and chairmanship remuneration for managers
    • Authors' rights
    • Retirement pensions
    • Rental income (land and furnished rentals)
    • Benefits paid as a result of illness, accident or maternity
    • Interest and dividends
    • Capital gains on securities (company shares)
    • Industrial and commercial profits (BIC)
    • Agricultural business profits (BA)
    • Non-commercial profits (BNC)

    How to declare your taxes in France when you are a border worker

    The French tax calendar is based on the civil calendar: the tax return for a year "n-1" is made in year "n". The tax return must therefore include all income received between 1 January and 31 December of the previous year.

    The tax return in France is done for most taxpayers online on the website of the French tax authorities ("teledeclaration" is indeed mandatory since the year 2019)

    We have produced a cross-border tax return tutorial to provide step-by-step guidance for taxpayers who wish to complete their tax return themselves.

    Important dates for the French tax return

    • The tax return in France started on Thursday 8 April 2021.
    • The deadline for submission of tax returns is set each year by the French tax authorities between April and June. It differs according to the department of residence of the cross-border taxpayer:
      • deadline for submission of tax returns for departments 01 to 19: 26 May 2021
      • deadline for submission of tax returns for departments from 20 to 54: 1 June 2021
      • deadline for submission of tax returns for departments from 55 to 976: 8 June 2021
      • non-residents (including Swiss residents): 26 May 2021

    The different forms and annexes of the French tax return

    The tax return is in the form of a main return (form 2042) and annexed returns.
    We have listed some of these below:

    • Income tax return (form 2042) : this is the standard form for declaring income received during the year. This form concerns all taxpayers.
    • Supplementary tax return of property income (form 2044) : in this form, the taxpayer must declare his rental income
    • Tax return of income received abroad (form 2047) This is the form on which income received in Switzerland (and possibly in other countries, except France) must be indicated. The French tax authorities also provide a form to help calculate the taxable Swiss salary (and therefore the Swiss salary in euros).
    • Declaration of bank accounts opened outside France (form 3916) : this is the form used by cross-border taxpayers to declare bank accounts opened in Switzerland (and in other countries). The declaration of accounts opened abroad is done by ticking box 8UU of the tax return, and the declaration of life insurance contracts taken out abroad (for 3rd pillars A and B) is done by ticking box 8TT of the same return.

    Declaration of bank accounts opened in Switzerland

    Any cross-border commuter with a bank account in Switzerland (or abroad more generally) must declare it to the French tax authorities. This declaration is made using form 3916.

    Failure to declare accounts opened in Switzerland is punishable for the taxpayer concerned:

    • a fine of EUR 1 500 per undeclared account
    • a tax surcharge of 80% on the sums not declared in these accounts, as well as any securities

    How is Swiss income taken into account for the calculation of cross-border worker tax in France?

    In the canton of Geneva, most cross-border taxpayers are subject to withholding tax.

    As the tax is paid in Geneva, a tax credit system, provided for on the French side, makes it possible to take into account this tax paid in Switzerland: insofar as this Swiss income will be declared by the cross-border taxpayer in his French tax return, the tax credit avoids double taxation.

    How is the tax credit (crédit d'impôt) for cross-border workers calculated?

    The tax credit is a tax credit equal to the French tax, i.e. the tax authorities will calculate the tax that you would have had to pay on the declared net taxable income if it had been received in France.

    Therefore, you will never have to pay additional tax if you declare only Geneva salaries as income.

    However, there is an exception for flight crews (aircraft and ships) who will be charged the tax actually paid in Switzerland. This means that if the French tax calculated is higher than the Swiss tax paid, there will be a supplement to be paid in France.

    How is tax calculated in France for cross-border workers?

    There are 3 main types of cases:

    1. the cross-border taxpayer is not subject to withholding tax in Switzerland : the French tax is calculated on the basis of the Swiss income, the Swiss taxable salary being calculated using the 2047 form help sheet
    2. the cross-border taxpayer is subject to withholding tax in Switzerland without any other income in France : there is no tax to pay in France
    3. the cross-border taxpayer is subject to withholding tax in Switzerland with income in France : the calculation of the tax rate takes into account both Swiss and French income, but this rate is only applied to French source income, as the tax credit avoids double taxation on Swiss source income only.

    Tax brackets in France for the year 2021

    In France, the tax rate is progressive: the tax rate increases in stages with the increase in income, calculated in brackets. This is known as a tax scale.

    For income received by a cross-border taxpayer in 2020 and declared in 2021, the tax rates are as follows:

    up to €10,084 0%
    from €10,085 to €25,710 11%
    from €25,711 to €73,516 30%
    from €73,517 to €158,122 41%
    from €158,122 45%

    The impact of the number of shares on taxes

    We have calculated the impact on the number of shares according to the family situation and the number of children.

    Note if a taxpayer no longer has a dependent child, lives alone on 1 January of the tax year and has raised a child alone for 5 years during which the child was dependent on him/her, box L of the tax return must be ticked and the taxpayer will have 1.5 lifetime shares instead of one.

    Married, partnered none 2
    Married, partnered 1 2,5
    Married, partnered 2 3
    Single, divorced, separated none 1
    Single, divorced, separated 1 1,5
    Single, divorced, separated 2 2
    Widow, widower none 1
    Widow, widower 1 2,5
    Widow, widower 2 3

    The stages of income tax calculation in France

    1. The net taxable income of the household is divided by the number of units
    2. The progressive scale is applied per bracket to the result of 1.
    3. The result obtained in 2. is multiplied by the number of shares

    Withholding tax in France

    Since 1 January 2019, income tax in France has been deducted at source. The French tax authorities deduct the amount directly from salaries and pensions.

    Cross-border commuters with no French-source income will not be affected by withholding tax, but if a spouse works in France, the household will be subject to withholding tax on the French-source income.

    Important deadlines for cross-border workers' taxation

    The taxation of frontier workers is punctuated by two major annual events:

    • the tax adjustment covering the period from the beginning of the calendar year to 31 March
    • the tax return in France which traditionally starts in April

    The overtime exemption: the 2041-AE employer certificate

    For cross-border commuters working in the cantons of Vaud, Valais, Jura, Neuchâtel, Berne, Solothurn, Basel-Stadt and Basel-Landschaft, an exemption for overtime worked in excess of 1,840 hours (for 100% work) is possible.

    To do this, you need to download the2041-AE employer's certificate, have it completed by your employer in Switzerland and send it to the French tax authorities.

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