COVID-19: Impact on your global workforce – Swiss Considerations from a individual tax, social security, and immigration perspective

Hans Geene Partner, People and Organisation, PwC Switzerland 21 Apr 2020

The international response to COVID-19 continues to develop and organisations are facing several potentially significant challenges to which they need to respond rapidly. There are many aspects to consider for employers of mobile workforces. Companies are forced to temporarily close sites, have employees work in their home offices, or bring employees back to Switzerland from critical regions.

This article describes some key considerations for employers from a Swiss immigration, social security, and individual income tax perspective.

Individual Tax (update 02.04.2020)

The filing deadline for Swiss individual income and wealth tax returns for 2019 has been extended in several cantons due to measurements imposed by the spread of COVID-19.

The current situation has also prompted the cantonal governments to grant various tax concessions to individuals. These tax concessions generally are relating to the adjustments of provisional tax invoices, waiver of interest on arrears, debt collection and reminders, and request for deferral or partial payment of final tax bills. 

For the direct federal tax, the waiver of interest on arrears applies for the period from 1 March 2020 to 31 December 2020. However, as Switzerland is a federal country each cantonal authority determines implementation of the provisions at its own discretion. Therefore, actual practices, tax concessions, as well as specific set deadlines will continue to vary from canton to canton.

The table below includes the various cantons who have extended their regular filing deadline for the 2019 individual income and wealth tax returns and a link to the cantonal sites describing implementation of additional specific measures. (n.b. The information on the individual cantonal sites may be in local language, so please contact your PwC Switzerland representative for any assistance.)

Canton Extended filing deadline Link to cantonal website
Aargau 30.06.2020 Access website
Appenzell-Ausserrhoden 31.05.2020 Access website
Basel-Land 30.06.2020 Access website
Basel-Stadt 31.05.2020 Access website
Berne 15.09.2020 Access website
Fribourg 30.06.2020 Access website
Geneva 31.05.2020 Access webiste
Glarus 30.06.2020 Access website
Grisons 31.05.2020 Access website
Jura 31.07.2020 Access website
Lucerne 31.05.2020 Access website
Nidwalden 30.06.2020 Access webite
Schaffhausen 30.06.2020 Access website
Schwyz 31.05.2020 Access webiste
Solothurn 31.07.2020 Access website
St.Gallen 31.05.2020 Access website
Ticino 30.06.2020 Access website
Uri 31.05.2020 Access webiste
Vaud 30.06.2020 Access website
Wallis 31.05.2020 Access website
Zug 30.04.2020 Access website
Zürich 31.05.2020 Access website

To date no general extension has been announced by the following cantons: Neuchatel, Grisons, Thurgau, Obwalden, Glarus, Vaud, Appenzell-Innerrhoden.

Cross-border commuters: France - Switzerland

Switzerland has different cantonal regulations for French cross-border commuters. For the cantons of Basel-Landschaft, Basel-Stadt, Berne, Jura, Neuchâtel, Solothurn, Valais and Vaud, the double tax treaty states that French cross-border commuters are taxed exclusively in their country of residence (France). The cantons receive compensation amounting to 4.5% of the gross salary.

In principle, cross-border workers must return to France every day (genuine cross-border workers). However, each year, 45 overnight stays outside the country of residence are permitted due to a professional necessity.

The question now arises to what extent the home office ordered by COVID-19 counts as a non-return day. This would have meant for the persons concerned that the employer would have had to deduct withholding taxes if the 45 overnight limit had been exceeded. Only the working days not performed in Switzerland could have been excluded from the withholding tax base.

In its press release of 19 March 2020, the French government communicated that France had reached an agreement with the surrounding countries (Belgium, Germany, Luxembourg and Switzerland) on tax arrangements. The following applies to Switzerland: the number of working days outside the country of employment may be exceeded as a consequence of these exceptional circumstances.

Nevertheless, as before, employers and employees must note the number of non-return days that occurred/will occur before/beyond the COVID-19 epidemic. In this way, they will not miss the change of status from “genuine” to “non-genuine” cross-border commuter and can correctly retain withholding taxes in 2020.

In contrast to the cantons mentioned above, French cross-border commuters in the canton of Geneva are always taxed at source.

OECD Guidance on COVID-19

On 3 April 2020, the OECD published an analysis suggesting that work-from-home arrangements arising from COVID-19 will not lead to the recognition of Permanent Establishments ('PEs'), nor to a change of corporate (tax) residence nor individual tax residency. Please see here our perspectives on this welcoming findings. 

Social Security

The exceptional situation relating to COVID-19 continues to raise a variety of social security law questions with respect to cross-border movement. On 14 April 2020, the Federal Social Security Office provided guidance primarily to minimize the impact of international coordination of social security due to the COVID-19 situation.

As before, A1s that have been obtained previously do not need to be amended. However, we strongly advise that organizations clearly document all moves of their workforce and the rationale for each move. We believe that such advance planning and documentation will greatly facilitate requests or applications for special treatment at a later date, should they become necessary.

The following sections briefly describe the applicable rules and regulations for specific cases.

General principle: Swiss social security coverage remains.

The exceptional situation in relation to COVID-19 does not alter the insurance status of persons to whom the Agreement on the Free Movement of Persons (AFMP) or the EFTA Convention applies, and who are normally subject to Swiss social security legislation based on these coordination rules. Persons who, during this exceptional situation, are temporarily unable to perform their work physically in Switzerland, temporarily carry out their activities from home, increasingly work from home, or are unable to visit their place of work in Switzerland to take up employment as stipulated in their employment contract, remain subject to Swiss social security.

The determination of insurance coverage by the AHV compensation funds in relation to the AFMP or the EFTA Agreement is decisive for all social security areas concerned, including health and accident insurance. Persons who are unable to physically attend their place of work in Switzerland to take up their planned employment are nevertheless obliged to insure themselves for health insurance in Switzerland within three months of the start of their employment in accordance with the Federal Law on Health Insurance (KVG).

Cross-border commuters from an EU or EFTA member state who carry out all or part of their work from home due to COVID-19 remain subject to Swiss social security law. The same applies to cross-border commuters who have previously usually worked in several countries. A temporary change in the proportion of work carried out in the country of residence due to the coronavirus does not change their Swiss insurance status.

The assignment period of employees whose employment in the assignment country is suspended will be considered as neither interrupted nor to be extended. A brief suspension of the activity of assigned employees in the country of employment, for whatever reason (e.g. return to the country of origin due to illness or other compelling reason), does not interrupt the assignment period nor does not, in and of itself, constitute a reason for a corresponding extension of the assignment period. The assignment will be considered as ending on the intended date.

In the case of a long-term interruption of the assignment period, the original period of the assignment may either be maintained, or the assignment may be terminated and a subsequent new assignment, for the same person in the same country, may be initiated if there is a break of at least two months between the two assignments.

General principle: Swiss social security coverage is required but caution should be taken with evaluating health insurance coverage.

The social security insurance coverage of persons to whom Swiss social security law normally applies on the basis of a bilateral social security agreement does not change if the persons concerned are temporarily unable to perform their work physically in Switzerland.

Persons who are unable to attend their place of work in Switzerland for the planned start of employment, in accordance with their employment contract, remain subject to Swiss social security, including accident insurance, but excluding health insurance. Swiss law does not provide for the possibility of providing health insurance for these persons. Instead, they will be subject to compulsory health insurance when they are no longer prevented from being physically present in Switzerland to perform their employment activities.

The assignment period of employees whose employment in the assignment country is suspended will be considered as neither interrupted nor to be extended. The same principles for assignments under the scope of the Agreement on Free Movement of Persons or the EFTA Convention (see above) will apply.

General principle: Swiss Social Security coverage can continue, but caution should be taken with evaluating continued health insurance and voluntary social security insurance participation.

  • Persons who pursue professional employment in Switzerland are mandatorily covered by Swiss Social Security. This also applies to persons from territories with which Switzerland has not concluded a social security agreement, who, due to the exceptional situation relating to COVID-19, are either temporarily forced to pursue their activities from home or temporarily unable to visit their place of work in Switzerland for the planned start of employment.
  • Persons who are unable to attend their place of work in Switzerland for the planned start of employment, in accordance with their employment contract, remain subject to Swiss law. This applies to all areas of social security, including accident insurance, but excluding health insurance. They will only be subject to compulsory health insurance when they are no longer prevented from being physically present in Switzerland to carry out their activities.

    Voluntary continuation of insurance is interrupted if the insured person returns to Switzerland and resumes either professional employment or residence in Switzerland. This person will then revert to standard insurance coverage in Switzerland during this period. As a consequence, the period of insurance in Switzerland is considered as “not interrupted,” thus providing for a later continuation of the insurance once employment abroad continues.
  • Persons who temporarily stop working after their return to Switzerland and, during this period, receive neither a salary nor a contributory replacement benefit, will also remain insured under the AHV/IV scheme, but not as an unemployed person, as this period is likely to be relatively short.
  • Insured employed persons who interrupt their assignment abroad in connection with the coronavirus but do not return to Switzerland - neither to work nor to live – will remain eligible to participate in voluntary continued insurance, provided the assignment abroad continues as soon as the situation returns to normal.

Relief Measures: Social Security Contributions

The Federal Council has decided to relieve companies affected with the following measures (decisions of 18 March and 20 March 2020): 

  • Companies have the option to apply for the adjustment of the provisional social security contributions, possible in the event of a significant reduction in the wage bill.
  • Interest on late payments for deferrals of payment granted in connection with the current crisis in accordance with Art. 34b AHVV is suspended for 6 months.
  • From Monday, 23 March 2020 until further notice, interest on arrears will be charged at 0% on all social security contribution claims.
  • From now on and provisionally until the end of June 2020, a reminder deferral will apply to social security contribution claims.

On 25 March 2020, Switzerland extended the strict entry requirements to cover flights from all Schengen states and the checks are now being made at all borders and include all flights from abroad.

This means that entering Switzerland is no longer possible except for holders of a Swiss passport, a valid C or D type visa issued by an official Swiss representation or a valid Swiss work and/or a Swiss residence permit (B, L, G or C type permit, or a legitimation card/Ci permit in the case of diplomats and staff of international organisations). Exceptions are granted also to people who need to enter Switzerland for important work-related reasons or emergencies, family members of a Swiss citizen or a Swiss resident who need to re-join their family in Switzerland, and doctors or medical staff urgently required in Switzerland.

Switzerland has suspended until 15 June 2020 the issuance to non-EU nationals of any further Schengen C type visas and national D type visas. Swiss immigration authorities will not accept/process any new work permit applications for non-EU and EU nationals, including on-line notifications, until 15 June 2020 and pending applications have been suspended. EU nationals who have a signed employment contract with a Swiss company, but do not yet hold a valid Swiss work/residence permit, are generally no longer able to enter Switzerland to start work. Exceptions are available for situations of absolute necessity, i.e. for a gainful activity of major public interest which guarantees the availability of essential goods and services to the population or that are required in the fight against COVID-19.

Swiss immigration authorities will continue to process applications for work and/or residence permit extensions of foreign nationals who are continuing to work and/or reside in Switzerland. In addition, people who are not able to leave Switzerland to return home may (if they can provide proof of incapacity to travel) receive exceptional authorization to remain in Switzerland until they can travel again.

As Switzerland is a federal state, each cantonal authority decides, at its own discretion, on the implementation of federal laws and directives. Therefore, actual practice will continue to vary from canton to canton.


PwC Switzerland is monitoring the impact of the COVID-19 situation on a daily basis to ensure that our clients are being proactively informed of any changes to the authorities’ practices. We will update this blog-post continuously in the coming weeks, so please return frequently for the latest information.

We know that many of you are interested in the impact of COVID-19 outside of Switzerland as well. Therefore we have released a global platform that will give you access to individual territory information as it develops. Please access the platform via this link.

Feel free to reach out to your local PwC representative or to one of us. We’d love to schedule some time with you to discuss how we can help you manage the impact of COVID-19 on your global workforce.

COVID-19: How to react as an Organisation

Further information to help you prepare your organisation and respond to the coronavirus-crisis can be found here.

Contact us

Mirela Stoia

Mirela Stoia

Director PwC Legal, PwC Switzerland

Tel: +41 58 792 91 16

Natalia Graf

Natalia Graf

Senior Manager, People and Organisation, PwC Switzerland

Tel: +41 58 792 43 24

Hans Geene

Hans Geene

Partner, People and Organisation, PwC Switzerland

Tel: +41 58 792 91 24

Ingo Heymanns

Ingo Heymanns

Senior Manager People and Organisation, PwC Switzerland