Do cross-border commuters have to pay taxes in both countries?
June 8, 2022 | 60,00 EUR | answered by Paula Bauer
Dear tax consultant,
My name is Erwin Bergner and I work as a cross-border commuter in Switzerland. In my case, I live in Germany and commute daily across the border to work in Switzerland. I am unsure whether I have to pay taxes in both countries or if there is a way to avoid this.
Currently, I pay my income tax in Germany, as I am registered there. However, I have heard that cross-border commuters are also liable for tax in Switzerland. I am worried that I will be double taxed and suffer financial losses as a result.
Could you please explain to me what the tax regulations for cross-border commuters are? Do cross-border commuters really have to pay taxes in both countries or are there specific agreements or regulations that prevent double taxation? What options do I have to optimize my tax situation as a cross-border commuter?
Thank you in advance for your help.
Sincerely,
Erwin Bergner
Dear Mr. Bergner,
Thank you for your inquiry regarding your tax situation as a cross-border commuter in Switzerland. As an expert on the topic of cross-border commuters, I am happy to explain in detail how the tax regulations for cross-border commuters work and how you may be able to avoid double taxation.
In general, cross-border commuters, who reside in one country and work in another, are subject to taxation in both countries. This means that as a cross-border commuter, you must pay income tax in both Germany and Switzerland.
However, there is a double taxation agreement between Germany and Switzerland that aims to prevent cross-border commuters from being taxed twice. This agreement determines which country has the right to tax the income of a cross-border commuter and how taxes are divided between the two countries.
Usually, as a cross-border commuter, you will generally pay taxes on your income in your country of residence, which is Germany. However, you may also be required to pay a withholding tax in Switzerland, which can be credited against your German income tax.
To optimize your tax situation as a cross-border commuter and avoid double taxation, it is advisable to seek advice from an experienced tax advisor. A good tax advisor can help you consider all tax aspects, identify opportunities for tax optimization, and ensure that you do not pay more taxes than necessary.
If you have any further questions or would like individual advice, I am at your disposal. Please do not hesitate to contact me to schedule an appointment for a detailed consultation.
Best regards,
Paula Bauer
