Entry into force of the additional agreement to

the double taxation agreement between Switzerland and France

Professional chartered accountant working on taxes

Insight
10 minute read
05/08/25

Jacques Kocher

Leader Payroll Services West, PwC Switzerland

The double taxation agreement between Switzerland and France has been updated and will be in effect from 1 January 2026. This development ensures continued legal certainty for cross-border teleworkers while incorporating modern tax practices to accommodate evolving work trends.

What:

The double taxation convention has been amended to include new telework rules.

Why:

To align with contemporary teleworking conditions and enhance tax cooperation between Switzerland and France.

Conclusion:

These amendments provide a robust framework for telework taxation, supporting ongoing remote work arrangements and legal clarity.

Background of the extension

On 24 July 2025, the update to the double taxation convention between Switzerland and France entered into force. This amendment establishes enduring tax rules for income earned from teleworking, set to apply from the beginning of 2026. The foundation of these new regulations dates back to the conclusion of negotiations in late 2022, aimed at perpetuating tax fairness amidst increasing telecommuting practices. This agreement allows cross-border employees to telework for up to 40% of their total working time without triggering international tax reallocation while implementing an automatic exchange of information.

Key objectives and benefits

What the additional agreement means for 2026

The revision of the double taxation convention introduces critical elements to modernize tax treatment for telework.

Employees whose telework covers up to 40% of their annual working time will see their remuneration taxed in their employer's state, with a subsequent 40% tax remittance to their residence state. This arrangement maintains stability for work patterns associated with remote activities (the 40% includes a maximum 10 business trips).

A new protocol ensures the automated sharing of salary data between states, providing transparency and efficient compliance with the updated tax provisions, where employers are required to certify the percentage of telework hours for employees in 2026 as part of the automatic exchange of wage data.

Details on information sharing:

Data attributes include the employee's full name, date of birth, postcode of residence, details of telework percentages or number of teleworking days, and the amount of total gross remuneration paid.

The update integrates OECD strategies to thwart base erosion and profit shifting (BEPS), thus fortifying commitment to global tax integrity.

This permanent framework underscores the commitment of both countries to adapt tax policies to modern work trends.

"The recent update brings substantial clarity to telework taxation, reinforcing cooperation between Swiss and French authorities."

Looking ahead: toward comprehensive implementation

The path to enhanced cross-border tax compliance

While the update marks a vital step, the long-term trajectory focuses on the full realization of contemporary telework tax rules once the convention takes hold on 1 January 2026. Employers and taxpayers should anticipate adjustments and monitor developments diligently.

Key aspects to consider include:

Documentation: Persist in accurate tracking of telework hours to fulfill forthcoming legal requirements.
Automatic data exchange: Employers will need to certify telework percentages for employees, facilitating more efficient and transparent tax administration. An issue that still raises many questions.
Coordination: Prioritize communication with payroll teams to ensure flawless compliance processes as this transition unfolds.
Consideration of social security laws: It is important to highlight that the supplementary agreement only covers tax aspects. For social security implications see below.

Practical tips for employers

Employers need to grasp the implications of the update and adapt accordingly:

Employers should take note of the following key points to remain compliant under the extended agreement:

Accurately record telework percentages or days per month

Ensure compliance with tax redistribution rules regarding telework beyond set limits (the conditions and consequences with tax liability in France are rather complex).

Detailed reporting obligations (according to Art. 5a withholding tax ordinance) may be required when a French resident employee terminates their working relationship with a Swiss employer, based on the adjustment of the withholding tax ordinance. In case of new joiners during the year, the remote work pattern and data needs to be considered by the new employer as per the full year to determine the correct percentage of work days in France

Ensure payroll processes account e.g. for any foreign workdays, travel days, third country working days or temporary assignments to maintain compliance with Swiss and French tax regulations.

Keep in mind, that for social security, different rules apply (e.g. split subordination in case the employee is neither a Swiss nor an EU-membership-state national) and therefore specific evaluation for each case is recommended.

Equip payroll systems to address evolving work arrangements effectively.

By proactively addressing these requirements, employers can minimize administrative burdens and avoid potential penalties.

Contact us