What are the risks of cross-border work in terms of taxes?
November 11, 2023 | 50,00 EUR | answered by Paula Bauer
Dear tax advisor,
I am Jenny Otten and I work as a cross-border commuter in Switzerland, while having my residence in Germany. Lately, I have been focusing more on the topic of taxes and have come across some uncertainties. I have heard that there can be risks related to taxes when it comes to cross-border commuting and I am therefore concerned that I may make mistakes that could lead to legal consequences.
Currently, I regularly commute to Switzerland and work there, while returning to Germany on weekends. I have heard that there are various tax aspects to consider, such as the taxation of my income in both countries, social security contributions, and the deductibility of business expenses.
My concerns mainly revolve around the fact that I may not be familiar with all tax regulations and rules, and therefore could make mistakes in my tax return. I want to ensure that I declare everything correctly and transparently to avoid potential tax claims or penalties.
Therefore, my question to you is: What specific risks exist in cross-border commuting in terms of taxes and how can I protect myself from them? Are there any specific regulations or rules that I need to follow in order to submit my tax return correctly and on time?
I thank you in advance for your support and look forward to your helpful tips and advice.
Best regards,
Jenny Otten
Dear Mrs. Otten,
Thank you for your message and your interest in the topic of cross-border work and taxes. It is understandable that you are concerned about the possibility of making mistakes in your tax return and risking legal consequences. I would like to provide you with some information and tips to support you in this matter.
Firstly, it is important to know that there are indeed some risks associated with cross-border work in terms of taxes, especially if the tax regulations in Germany and Switzerland are not correctly followed. Some of the most common risks include double taxation of income, incorrect reporting of expenses, or non-payment of social security contributions.
To protect yourself from these risks, it is advisable to gather information beforehand and seek professional help if necessary. Here are some specific measures you can take:
1. Educate yourself on the tax regulations in Germany and Switzerland: It is important that you understand the basic tax rules in both countries to avoid errors in your tax return.
2. Use the services of a tax advisor: A professional tax advisor specializing in cross-border work can help you correctly fill out your tax return and consider all relevant aspects.
3. Consider specific regulations and provisions: There are certain regulations for cross-border workers, such as the double taxation agreement between Germany and Switzerland, that you should take into account when filling out your tax return.
4. Keep accurate records of your income and expenses: It is advisable to keep all relevant receipts and documents to be able to prove the accuracy of your information in case of inquiries from tax authorities.
Overall, it is important that you start dealing with the topic early and carefully review all relevant information. By following the tips mentioned above, you can ensure that you submit your tax return correctly and on time, minimizing potential risks.
I hope this information is helpful to you and I am available for any further questions. Thank you for your trust and I wish you success in your cross-border work.
Best regards,
Paula Bauer, Tax Advisor
