What do I need to consider when working as a cross-border commuter?
July 19, 2023 | 60,00 EUR | answered by Helma Fischer
Dear Mr. Tax Advisor,
My name is Isabel Huber and I work as a cross-border commuter in Switzerland. Until now, I have been employed, but now I am considering becoming self-employed. I have heard that there are some special considerations that I must take into account as a cross-border commuter when I am self-employed.
My current situation is as follows: I work in Switzerland and live in Germany. As an employee, I usually paid my taxes in Switzerland and filed a tax return in Germany. Now I am wondering how this would change if I were self-employed. What taxes would I have to pay in Switzerland and in Germany? Are there any special regulations for cross-border commuters who are self-employed?
I am concerned that I may have to pay taxes twice or that there may be problems with the authorities if I do not comply with all the regulations correctly. I would like to inform myself in order to avoid any potential problems in advance and to start my self-employment as smoothly as possible.
Could you please explain to me what I need to consider as a cross-border commuter when I am self-employed? What taxes are due and how can I ensure that I pay everything correctly? Are there any specific forms or applications that I need to submit? I would be grateful for any information that would help me successfully implement my self-employment as a cross-border commuter.
Thank you in advance for your help.
Sincerely,
Isabel Huber
Dear Mrs. Huber,
Thank you for your inquiry regarding your self-employment as a cross-border commuter in Switzerland. It is understandable that you are concerned about the tax implications and want to ensure that you handle everything correctly and smoothly. As a tax advisor specializing in cross-border commuter issues, I am happy to assist you and answer your questions.
As a cross-border commuter working in Switzerland and living in Germany, you are generally subject to the Double Taxation Agreement between Germany and Switzerland. This means that your income should generally only be taxed in one of the two countries to avoid double taxation. However, as a self-employed individual, there are some specific considerations you need to keep in mind.
If you are self-employed, the taxation primarily depends on your country of residence, which is Germany. This means that you must pay taxes on your self-employment income in Germany. However, you will also need to pay taxes in Switzerland since you are working there. Typically, taxation is done at the place of work, which is Switzerland in this case.
To avoid double taxation, you can utilize the so-called credit method. This involves crediting the taxes paid in Switzerland against your German taxes. This ensures that you do not have to pay taxes twice on the same income.
It is important that you keep thorough records of all income and expenses and declare them properly in both Germany and Switzerland. You will need to file a tax return in both countries. As a self-employed individual in Switzerland, you may need to fill out additional forms to accurately report your income.
For self-employed cross-border commuters, there are specific regulations and forms that you need to be aware of. It is advisable to consult with a tax advisor early on to receive all relevant information and ensure that you comply with all regulations correctly. This way, you can avoid any potential issues in advance and successfully carry out your self-employment.
I hope this information is helpful to you. If you have any further questions or need assistance, please feel free to contact me.
Best regards,
Helma Fischer
Tax Advisor
