Email: info@se-legal.de This means that German doctors will no longer provide their patients with a printout of the certificate of incapacity for work. Where income is earned from cross-border work, several States may, by virtue of their own sovereignty in tax matters, claim the right to levy tax on that income in accordance with their relevant legislation. A comparative analysis of the obstacles to the cross-border mobility of paid employment has shown that those set out below are of major importance for frontier workers in the European Union. Living and working in two countries is not infrequently associated with various legal complications, which can sometimes be stressful for those concerned. second, whether or not the remote working is considered as the posting of an employee. They will be happy to take over the entire application for your cross-border commuter card for you and ensure that all open questions are clarified with the competent authorities so that you can fully concentrate on your core tasks. If the fiscal household has other sources of income in the country of residence, in particular as a result of work by the spouse, the 'effective rate' rule may be applied: the State of residence than reserves the right to take into account the amount of trans-national remuneration when calculating the effective rate of tax payable on the other income of the person concerned(8). New aid is available for companies investing to improve their environmental impact. Such examples can be found many times over. This figure is 60% higher than in the same period last year. Germany: Arrangements for cross-border workers extended for the last time through June 2022 (COVID-19) April 26, 2022. either by email to saisieCIT.cns@secu.lu. As a cross-border worker, you can take advantage of possible deductions and other tax benefits of the German tax system under certain conditions. This is usually a neighbouring country. Residency for Cross-Border Commuters in Germany, Requirements for the Cross-Border Certificate, Special Case: Facilitated Requirements for Swiss nationals, Application Process and Period of Validity, Contact our Lawyers for German Immigration Law, 12 German Residence Regulation (AufenthV), German Immigration Lawyer for Private & Business Clients. The principles of the Recommendation were largely confirmed by the Court of Justice in its judgment of 14 February 1995 in the Schumacker case (C-279/93). France has a clear lead as the main 'exporter' of cross-border labour in Europe: there are around 179 000 French nationals living in France and working abroad. The Luxembourg tax authorities published on 26 August 2022 some important clarifications on how to apply the threshold of days worked in Luxembourg for cross-border workers who are tax resident in Germany, Belgium, or France. The peripheral regions of the European Union, to the North (the Scandinavian countries) and South (towards the Iberian peninsula) are less significant in terms of cross-border work, either because of the geographical configuration of the area concerned, or because of specific features of the local labour market. The topic of cross-border workers is the third part of the study ' Vivre ensemble au Luxembourg ' (Living Together in Luxembourg), which includes a section on 'the political and social participation of all residents' and 'the challenges of social cohesion'. The concepts of cross-border work The law of the insured's country of residence applies concerning the determination of who qualifies for benefits in their capacity as a member of the insured's family. The first chapter is devoted to determining the rules, particularly tax and social security rules, affecting cross-border work. . Home Insights Germany: Arrangements for cross-border workers extended through March 2022 (COVID-19) January 26, 2022 The coronavirus (COVID-19) pandemic presents particular challenges for cross-border commuters who normally commute daily from their country of residence to work in another country. The cross-border worker residence endorsement sticker is valid for 1 year. Their biggest employer is Switzerland (74 000 in 1995), but they also work in Germany (45 000 in 1995), Luxembourg (27 800 in 1995) and Monaco (around 18 000 in 1994). Exposed to commuting factors, cross-border workers (CBWs) constitute a potential high-risk population. Newly introduced, in comparison to the draft bill of 10 December 2019, is the reform of the controlled foreign corporation (CFC) rules to prevent tax-induced shifting of passive income to low-taxed jurisdictions. The first problem is thus the lack of a uniform definition of cross-border work which, depending on the criteria used, may lead in practice to the identification of various population groups. The research was carried out on the basis of current and pending national and Community legislation, documents made available to us by organizations representing frontier workers at local level, and existing literature in this field. The sources and reference years for those figures which are available differ widely: the published figures are often variable between one country and another, and even within the same country, depending on the authorities which have compiled them (social security agencies, employment offices, tax offices, etc.). Fax: 0221 932959669, Frankfurt 60314, Hanauer Landstrasse 291 B, Privacy Policy In order to avoid such trans-national income being taxed twice (double taxation), most European States have concluded bilateral tax agreements, which are mostly standardized in line with the OECD model convention, on the double taxation of income and capital. France is followed by Italy, with around 40 000 cross-border workers, most of whom work in Switzerland. In view of the current pandemic situation, these agreements will apply until at least the end of March 2022. Offices : 4 Rue Mercier L-2144 Luxembourg Luxembourg Letters : L-2980 Luxembourg Moreover, despite paying contributions like any employee resident in the Swiss Confederation, frontier workers do not receive certain old-age and invalidity benefits, which remain subject to residence in Switzerland(35). A permit is granted only if a worker has already found an employer and after it has been checked that no-one on the local register of job-seekers has requested that type of work. By allowing remote working, inbound or outbound employers may unintentionally create a PE or PR in Germany or abroad. Temporary tax-free importation of vehicles The French tax authorities, for their part, even after the new tax agreement was ratified, continued to levy tax at source on the pay of frontier workers who were now liable to tax in Italy. Planned outpatient treatment is paid for by the competent country according to the rates and tariffs in force there. The study comprises three parts. Extension of the mutual agreement between Luxembourg and Germany for cross-border workers until 31 March 2022. More specifically, Article 7 of Regulation (EEC) No 1612/68 on freedom of movement for workers within the Community(2) provides for equality of treatment in respect of any conditions of employment and work, in particular as regards remuneration, dismissal and, should workers become unemployed, reinstatement or re-employment. However, until 1 July 2022, the transitional solution provides that doctors must print hard copies of certificates from their practice software for patients who request them. This means that the status of former frontier worker no longer exists: as soon as a frontier worker loses his job, he will automatically lose the benefit of his Swiss insurance and will have to take steps in his State of residence to secure new insurance cover. In the increasing trend, in the majority of the Member States, towards using tax receipts to help finance social security systems, the interaction between direct taxation arrangements and the financing of national social security systems is probably the number one problem specifically affecting cross-border work, in cases where social security contributions are paid in one country and tax is paid in another(22). 3.4. Social security Get the latest KPMG thought leadership directly to your individual personalized dashboard, Do Not Sell/Share My Personal Information, Germany: Arrangements for cross-border workers extended through March 2022 (COVID-19). If you drive a company car registered in the country where you work , you may also use it in the country where you live without having to register it there. No specific provisions regarding cross-border work, 23.8.1958 and supplementary protocol of 15.6.1973, Article 10, Taxation in the State of residence if employment and residence are located in the frontier zone (30 km on the German side and the departments of Haut-Rhin, Bas-Rhin and Moselle on the French side for French frontier workers and 20 km for German frontier workers), otherwise taxation at source, 21.7.1959 and additional agreement of 28.9.1989, Article 13, Taxation in the place of residence; frontier zone of 20 km on each side of the border, expressed in a list of frontier communes. End of special Covid arrangements. Electronic certificate of incapacity for work in Germany On 1 October 2021, the electronic certificate of incapacity for work (eAU) was introduced in Germany. The most important problems encountered by frontier workers working in Switzerland concern social protection, and are essentially as indicated below(33). The situation of frontier workers living in the European Union and travelling to work in the Swiss Confederation exhibits major differences from that of frontier workers working and residing within the European Union(31). Legal framework Programmes and schemes for cross-border mobility A range of programmes, initiatives and schemes run by the European Union (EU), the federal government (Bund), the federal states (Lnder) and foundations help promote cross-border mobility in the area of vocational education and training. Given that Switzerland is host to almost half the frontier workers in Europe (around 150 000, according to our estimates), the social security and tax regimes for frontier residents employed there, and the arrangements for access to the labour market, have been analysed. 1.3. Interaction between direct taxation and social security 2023 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. THE LEGAL FRAMEWORK FOR CROSS-BORDER WORK 1.1. 1.4. A frontier worker may thus either pay social security contributions twice over (this is the case with Italian or Belgian residents working in France(23)) or else pay very little in contributions (the opposite hypothesis). With regard to reimbursement of healthcare, treatment provided in the country of residence can only be reimbursed by the country of residence according to its own rates, tariffs and terms. 70 differences in the rates of direct tax and social security contributions between the country of residence and the country of employment. The specific feature differentiating them from other EURES networks is their multilateral nature, since they involve local social operators, trade unions and employers, as well as public-sector employment services. These workers, also called cross-border commuters or frontier workers, can be employed or self-employed with company headquarters in Switzerland. Imprint Background Mobility of workers living in one country and working in a different country has increased in the European Union. There are no rules which guarantee the cross-border worker the right to the most favourable of the tax regimes of the Member States involved (see the Gilly case, para 46. c) Interaction between the tax and social security systems of the Member States: e) Lack of proper information for frontier workers and of cooperation between the competent national authorities (role of the EURES network and cross-border social dialogue). Then you can apply for a cross-border worker residence endorsement sticker. This is a transitional solution valid until 1 July 2022. . In addition, a frontier worker who has paid less than a year's contributions in Switzerland is not entitled to an old-age pension, nor to a refund of the contributions paid to the AVS. For example, the lack of a common definition of the concept of incapacity for work and differences in the assessment of degrees of disability cause difficulties(10), as does the diversity of the systems used to calculate the number of years of contributions which are taken into account and the age requirements for granting statutory pensions(11). In this regard, it is recommended to ask the doctor to indicate the Luxemburgish national identification number, or, if necessary, to mark it themselves on the back of the medical certificate. The main feature is that non-resident persons should benefit from the same tax-treatment as residents, if they obtain the major part of their total income in one Member State . Neighbouring Member States with many persons crossing borders to work often agree special rules for cross-border workers in their bilateral double taxation conventions. If you live in one country but work in another, that's you! For this purpose, clause 1 (1) of the COVID-19 Agreement between Switzerland and Germany, for example, feigns that cross-border workers return to their place of residence every workday. This . It may take the form of a payment to the other State, as part of the implementation of a bilateral agreement, of a percentage of the gross or net total amount of wages and salaries paid to frontier workers, as in the Franco-Swiss system, or a percentage of the tax collected, as in the Italo-Swiss system. Proof that you work in the Netherlands, for example your employment contract. You apply for the cross-border worker residence endorsement sticker at an IND desk. Home German Immigration Lawyer for Private & Business Clients Residency for Cross-Border Commuters in Germany. The pension fund takes into account all insurance . KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. In times of the Corona crisis, companies have in many instances ordered that work, as far as factually possible, should no longer be carried out at the companies' premises but from home for reasons of health protection. Social security sources have one major limitation, however: they underestimate the statistics. The concepts of cross-border work 1.2. The S1 form delivered by the competent healthcare fund must be presented to the health fund in the country of residence. 50674 Cologne The S1 form is a document of legal entitlement to healthcare benefits delivered by the competent country (country where contributions are paid) and allows registration in the country of residence. Aliens Act Implementation Guidelines (in Dutch: You live in another EU country, for example Belgium or Germany. This applied generally as from 2021 but is delayed by one year. On 21 December 1993 the Commission issued a Recommendation (94/079/EC) on the taxation of certain items of income received by non-residents in a Member State other than that in which they are resident. Finally, since the Community coordinating system introduced by Regulation (EC) No 1408/71 does not cover contractual social security schemes(13), there is a complete lack of coordination of national systems of non-statutory schemes, particularly as regards pre-retirement benefits(14) and supplementary pensions, entailing the non-exportability of the corresponding benefits. Every country has a different definition of what constitutes a "border region". If you are a cross-border commuter and you work more than 25% of the . Copy of the TWV, if you need that in the Netherlands. This may be the case for instance as regards costs for travelling to and from work, social security contributions paid in the Member State of employment/self-employment, child-care fees, pension contributions etc. Swiss citizens can obtain a special certificate with a validity period of at least five years from the competent authority to exercise gainful employment or self-employment. Furthermore, the Regulation, the procedure for modifying which requires unanimity within the Council (legal basis: Articles 51 and 235 of the EC Treaty), does not duly take into account the introduction, in some Member States, of new types of social benefits which may not correspond to the traditional branches of social security that appear in the Regulation itself (e.g. The Canadian city of Sault Ste. to work / to study within the specified limits. Then you must apply for a new residence endorsement sticker. Pendlerinfo; Eures Kompas; Access to healthcare services Tax arrangements applicable to cross-border work 1.4. Requirement to produce a 'frontier worker's card' in order to be considered as such, Taxation in the State of residence. B10/2.2. No definition of frontier zone, Taxation in the country of residence if employment and residence are in the frontier zone (list of communes on both sides of the border, intersected by a line 20 km from the border), otherwise taxation at source, 11.4.1967, Article 15(3), and protocol annexed to the agreement, Taxation in the State of residence, provided that employment and residence are in the frontier zone (list of communes on the Belgian side and list of regions on the Dutch side), otherwise taxation at source. If the insured person was given a "directive" authorisation from the competent country, the insured person advances the cost and is reimbursed by the competent country according to the rates and tariffs in force there. Results of quantitative analysis, 3.1. Cross-border workers German cross-border workers Applicable rules The insured person is considered a cross-border worker if they work (and are insured) in a different EU country than the one they reside in and under the condition that they return to the country of residence every day or at least once a week. The following consultation agreements are currently in place: Read a January/February 2022 report [PDF 270 KB] prepared by the KPMG member firm in Germany. (+352) 27 57 - 1, Leaflet "Cross-border workers in Luxembourg", //cns.public.lu/en/publications/documentations/frontaliers-brochure.html" title="Leitfaden fr Grenzgnger ">Leitfaden fr Grenzgnger. proof of studies (certificate of registration). The application for a border-crossing certificate must be addressed to the applicants authority in whose jurisdiction the place of the intended gainful employment falls. According to Article 39 EC and Article 7 of Regulation 1612/68, non-resident workers shall enjoy the same tax advantages as national workers. Cross-border remote work Corporate Tax and Permanent Establishment considerations As a result of its geographical situation Luxembourg is the third-largest importer of cross-border labour in Europe, employing 54 000 cross-border workers from France (27 800), Belgium (16 600) and Germany (9 800) in 1995. Where sickness insurance is concerned, frontier workers residing in a European Union country and employed in Switzerland, together with their families, may subscribe to the compulsory system laid down by the Swiss Confederation for all residents. A cross-border worker is someone who lives in one country but works in another country. You live in the other EU country with a residence permit. Due to the travel restrictions caused by COVID-19 measures, cross-border workers face the risk their employment income would become fully taxable in the state of residence. Lack of information and administrative cooperation Following registration as a cross-border worker from Germany, the S1 form is normally sent automatically to to the private address of the insured person, who should present the form to a German health insurance fund of his choice. European Union (EU) programmes These are the steps in the application process for the cross-border worker residence endorsement sticker: No residence permit, but a cross-border worker residence endorsement sticker, Call the IND for an appointment for a cross-border worker residence endorsement sticker. The Community definition in the social security field covers both employed and self-employed persons. You are here: Proof of registration in the other EU country of the citizen of the EU, EEA or Switzerland. Third country nationals living together with their German spouse or life partner. The cross-border worker insured in Luxembourg must register with the health insurance fund of their place of residence in order to benefit from health care reimbursements. If you have any questions, you can call us at any time. This revision has replaced the 'couple's pension', the calculation of which did not take into account the spouse's place of residence, by an individual pension for each spouse and introduced, instead of the former, new care allowances, eligibility for which is subject to residence in Switzerland. The Community rules on coordination are not concerned with the financial aspects of social security. By and large, the data available come mainly from the processing of figures provided by social security, population censuses and, for European frontier workers working in Switzerland, from the figures of the Central Aliens Office in Berne. The cross-border insured and the members of their family are entitled to the same benefits under the same terms and conditions as those to which the residents of the Grand Duchy of Luxembourg are entitled. For example, specific regulations apply to cross-border commuters regarding social insurance, tax liability and vehicle registration. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Regulation (EEC) No 1408/71(4), coordinating the social security systems of the Member States, and its implementing regulation, Council Regulation (EEC) No 574/72(5), include, inter alia, specific provisions concerning certain benefits for frontier workers. Documents that show your family relationship, for example your marriage certificate. Methodological note For them, border-crossing certificates can be issued and renewed per the conditions laid down in Annex I to the Agreement on the Free Movement of Persons between the EU and Switzerland.
