What tax benefits do I have as a cross-border commuter compared to employees who work domestically?
December 15, 2023 | 60,00 EUR | answered by Selma Rosenblatt
Dear Tax Advisor,
My name is Erwin Hirschfeld and I work as a cross-border commuter in Switzerland. I have heard that there are tax advantages for cross-border commuters compared to employees working domestically. I would like to learn more about this to ensure that I am utilizing all opportunities for tax savings.
Currently, I work in Switzerland and live in Germany. My gross salary is 80,000 CHF per year. I am single and have no children. Since I live in Germany, I am also subject to taxation there, but my income from Switzerland must also be taxed in Switzerland.
My concerns mainly revolve around not knowing exactly what tax advantages I am entitled to as a cross-border commuter and how best to utilize them. I want to make sure that I am not paying more taxes than necessary and that I am taking advantage of all legal opportunities for tax savings.
Can you please explain to me what specific tax advantages cross-border commuters have compared to employees working domestically? Are there any special regulations or deductions that I can benefit from? And what steps do I need to take to take advantage of these benefits?
Thank you in advance for your support and advice.
Sincerely,
Erwin Hirschfeld
Dear Mr. Hirschfeld,
Thank you for your inquiry and your interest in the tax benefits for cross-border commuters. As a cross-border commuter working in Switzerland and living in Germany, you do indeed have some tax advantages compared to employees who work exclusively domestically.
One of the most important benefits for cross-border commuters is the ability to take advantage of the so-called Double Taxation Agreement between Germany and Switzerland. This agreement states that your income will only be taxed in one of the two countries in order to avoid double taxation. In your case, this means that while your income from Switzerland will be taxed in Switzerland, it must also be declared in Germany. However, the taxes paid in Switzerland will be credited to you to avoid double taxation.
Another advantage for cross-border commuters is the ability to deduct certain costs incurred in connection with your work in Switzerland for tax purposes. This includes, for example, commuting allowance, meal expenses, accommodation costs, or costs for work materials. You can list these expenses in your tax return to reduce your tax burden.
To take advantage of these tax benefits as a cross-border commuter, it is important to carefully document your income and expenses and keep all relevant receipts. Additionally, you should submit your tax return correctly and on time in both Germany and Switzerland to benefit from the applicable regulations.
It is advisable to seek advice from an experienced tax advisor to ensure that you maximize all opportunities for tax savings as a cross-border commuter. I am available for consultation in my online office hours to discuss your individual situation and assist you with optimizing your tax matters.
I hope that I have answered your questions comprehensively and am available for further information.
Sincerely,
Selma Rosenblatt
