Can cross-border commuters also be liable for tax in their country of residence?
July 8, 2023 | 60,00 EUR | answered by Thomas Schottmann
Dear tax advisor,
my name is Emma Falk and I work as a cross-border commuter in Switzerland. However, I live in Germany. In the past, I was under the impression that I am only liable for taxes in Switzerland, as I work there. However, I have now heard that it is also possible for cross-border commuters to be liable for taxes in their country of residence.
This information is very concerning to me, as I fear that I may have to pay taxes in both countries. This would be a significant financial burden for me. Therefore, I would like to know from you if it is indeed possible for cross-border commuters like me to be liable for taxes in their country of residence.
If this is the case, I would like to know what steps I can take to avoid possible double taxation. Are there any special regulations or agreements between Switzerland and Germany that could help me in this situation? Or are there other ways to optimize my tax situation as a cross-border commuter?
Thank you in advance for your support, and I look forward to your response.
Sincerely,
Emma Falk
Dear Mrs. Falk,
Thank you for your inquiry as a cross-border commuter in Switzerland. It is understandable that you are concerned about the possibility of having to pay taxes in both countries. I will try to provide you with a detailed answer to your questions.
As a cross-border commuter working in Switzerland and living in Germany, you generally have to pay income tax in Switzerland for the income you earn through your work there. However, you may also be subject to tax in Germany, especially if you have additional income or assets there.
To avoid double taxation, there is a Double Taxation Agreement (DTA) between Switzerland and Germany. This agreement determines which country has the right to tax certain income and how taxes can be credited or exempted to avoid double taxation. Cross-border commuters are usually covered by this agreement.
To ensure that you benefit from the provisions of the DTA and avoid double taxation, it is important to carefully review your tax situation and take appropriate action. It is recommended to consult a tax advisor who is familiar with cross-border tax issues.
A specialized tax advisor can help you properly account for your income and assets in both countries and apply the relevant provisions of the DTA. This way, you can make sure you do not pay more taxes than necessary and benefit from the advantages of the agreement.
In addition to the provisions of the DTA, there are other ways to optimize your tax situation as a cross-border commuter. This includes utilizing tax allowances and deductions in both countries to reduce your tax burden.
Overall, it is possible for cross-border commuters like you to be subject to tax in their country of residence as well. However, there are regulations and agreements that can help you avoid double taxation and optimize your tax situation.
I hope my response is helpful to you and I am available to discuss your individual situation in more detail.
Best regards,
Thomas Schottmann
