Cross-border commuters in the tax sense are persons who work as an employee in one state and reside in another state. Cross-border
commuter regulations exist in the double taxation agreements (DTAs) with Switzerland, France and Austria. Since cross-border commuters are
foreign employees, in these cases the supporting documents for Annex N-Gre must be submitted directly with the income tax return
(obligation to submit supporting documents).
If you live in Germany and work in Switzerland, you are a cross-border commuter. Your salary is generally taxable in Germany. Switzerland is entitled to deduct a withholding tax of 4.5 percent. To avoid a higher tax deduction in Switzerland, you need a certificate of residence issued by the tax office. This is usually renewed automatically every year.
At the beginning of your cross-border activity, you will receive a questionnaire. Please answer the questions completely and accurately. Your answers are an important basis for a quick
processing and appropriate tax treatment by your tax office.
After submitting the questionnaire, you will be assigned a tax number.
The tax office will determine quarterly advance payments (10.03., 10.06., 10.09. and 10.12., § 37 Income Tax Act), if the domestic tax is higher than the withholding tax deducted at 4.5 percent.
You will receive an advance payment notice regarding the advance payments to be made.
I recommend the direct debit procedure in payment transactions with the tax office
The cross-border commuter has to file an annual income tax return. For your Swiss salary, please use the Annex N-Gre for the corresponding year.
These can be found for all years in the Federal Tax Administration's forms management system
You can also submit the tax return via ELSTER to submit it. Annex N-Gre is also available there.
Tax returns must generally be completed and submitted by 31.07. of the following year. Due to the pandemic, the deadlines have been postponed as follows
Income tax return 2022 submission deadline until 02.10.2023
Income tax return 2023 submission deadline until 02.09.2024
If you do not submit your income tax return to the tax office within the specified submission deadline, you will receive reminders and, if necessary, enforcement measures and an
estimate of the tax base. If the tax return is submitted late, a late filing surcharge may be imposed (Section 152 of the German Fiscal Code (AO)).
Submit the required documents and information in full with your tax return. Please note that there are extended obligations to cooperate in the case of foreign matters (§ 90 Para. 2 AO). Please enclose at least the following documents with your return:
- Wage statement including additional or supplementary sheets in the original,
- Certificate from the pension fund showing the amount of employer and employee contributions to the mandatory and extra-mandatory scheme,
- Certificate of contributions to foreign health insurance,
- Proof of the employer's contribution to daily sickness benefits insurance (KTGV) and non-occupational accident insurance (NBUV),
- in the event of termination of cross-border commuter employment, the pension fund termination statement and proof of the whereabouts of the vested benefits.
Once your tax return has been processed, the annual tax will be assessed with a tax assessment notice. If necessary, the advance income tax payments for the following calendar years will also be adjusted.
The advance payments made and the withholding tax of up to 4.5 percent levied in Switzerland will be credited against the annual tax.
Please notify the tax office of any changes in your personal circumstances, such as income, marital status, address, bank details, without being asked to do so.
It is important that you inform the tax office of such changes immediately. This will help you avoid "unpleasant" additional payments or save you from having to make excessive advance payments.
If you stop working as a cross-border commuter, please inform the tax office immediately. Future advance payments can then be cancelled or reduced in good time.
You can ELSTER for notifications to the tax office.
The exchange rate applicable for income tax assessment is (based on CHF 100):
- 102.50 € for 2023
- 99.00 € for 2022
- 92.00 € for 2021
For specific individual questions, please contact your tax advisor or your local tax office.
For cross-border commuters who live in Germany and work in Switzerland, the home office rules that applied prior to the Corona pandemic will once again apply as of the beginning of July 2022. The rules that applied during the Corona pandemic expired on this date. Those who continue to work primarily from home but regularly visit their place of work in Switzerland can still retain cross-border commuter status. "Regularly" means that the employee travels to and from Switzerland to work at least one day per week or at least five days per month. Then the cross-border commuter status is retained.
In the case of cross-border commuters who regularly visit their place of work in Switzerland, the cross-border commuter status ceases to apply if the person does not return to his or her place of residence for more than 60 working days after the end of the working day due to his or her work. Working days spent at the place of residence for a whole day do not lead to non-return days and therefore do not result in the loss of cross-border commuter status.
However, if commuting is not regular, the right to tax income from employment is no longer based on the cross-border commuter rule. Instead, the following then applies: Switzerland has the right of taxation for days that the employee works in Switzerland. For days worked in Germany in the home office, Germany has the right of taxation.
Further information:
During the Covid 19 pandemic, many employees remained permanently in the home office due to the measures taken to combat the pandemic; thus, regular commuting in the sense mentioned above did not take place. To ensure that these measures did not lead to the loss of cross-border commuter status, Germany had concluded an intergovernmental agreement (so-called consultation agreement) with Switzerland: This consultation agreement simulated for cross-border commuters for home office days the performance of work in the contracting state in which the otherwise usual place of work would have been located without the pandemic-related restrictions, and assumed a regular return to the place of residence for these work days. This consultation agreement was valid from 11.03.2020 to 30.06.2022. For the period starting 01.07.2022, this fiction no longer applies.
For the special regulations, see: Covid-19 Pandemic DTA Switzerland Disposition Memorandum of Understanding
Practical advice:
For the employees who lose their cross-border commuter status in the future, the residence certificates (Gre-1 and Gre-2) can no longer be issued. The certificates of residence serve as a template for the Swiss employer to limit the withholding tax to 4.5% of the gross salary (Art. 15a para. 1 sentence 3 DBA-Switzerland).
If the employees no longer fulfill the cross-border commuter status, they no longer have to fill out Annex N-Gre in their tax return. For the apportionment of the right of taxation according to the place of activity principle pursuant to Art. 15, para. 1 DBA-Switzerland, Annex N and N-AUS must be completed. For the year 2022, this means for taxpayers for whom the cross-border commuter regulation is no longer applicable as of July 2022, that they must enter their wages for the period January to June 2022 in the annex N-Gre and the wages for the period July to December 2022 in the annexes N and N-AUS. From the year 2023 onwards, in the event of loss of cross-border commuter status, only Annex N and N-AUS would have to be completed.
A frontier worker according to Art. 13, para. 5 DBA-France is a person who works in the frontier area of one Contracting State and has his permanent place of residence, to which he usually returns every day, in the frontier area of the other Contracting State
In principle, the status of a cross-border commuter is lost if
- the cross-border worker does not return regularly to his place of residence, or
- he is also employed in municipalities outside the border zone
However, failure to meet the requirements for a short period of time (up to 45 days or up to 20% of the total annual working days in the case of employment relationships lasting less than one year) does not pose a problem. France and Germany have agreed on this in a memorandum of understanding.
The border area for cross-border commuters residing in Germany comprises the cities and municipalities whose territory is wholly or partially located at a maximum distance of 20 km from the French-German border.
At the beginning of your cross-border activity in France, you will receive a questionnaire. Please answer the questions completely and accurately. Your answers are important for a quick processing and appropriate tax treatment.
After submitting the questionnaire, you will receive a tax number.
In addition, you must make advance payments on the anticipated annual tax on a quarterly basis (10.03., 10.06., 10.09. and 10.12.) (Section
37 of the Income Tax Act). You will receive an advance payment notice regarding the advance payments to be made. The direct debit procedure
for payment transactions with the tax office has proven to be very effective and is recommended.
If the employee is a cross-border commuter, the French employer does not have to deduct withholding tax on the salary if the employee has a certificate of residence.
For this purpose, the cross-border commuter must submit this application using form S2-240.
The German cross-border commuter fills out Section I of the three copies of the form. He submits the three copies to his French employer, has him issue the certificate provided for in Section II and then submits the three copies to the tax authority responsible for him in Germany. After issuing the certificate provided for in Section III, the latter retains the second copy of the form and returns the remaining two to the frontier worker, who gives the first copy to his French employer and retains the other.
The French employer must attach the first copy of the form to the annual declaration of wage/salary payments in which the German cross-border worker is listed.
The application must be submitted annually. If the German cross-border worker changes French employer, a new application must also be submitted, even if he remains a cross-border worker.
As a cross-border commuter, you must file an annual income tax return. For your French wages, please use Annex N-Gre for the relevant year.
In the case of foreign matters, there are extended obligations to cooperate (Section 90 (2) of the German Fiscal Code). You must submit the required documents and information in full with your tax return.
Once the processing of your tax return has been completed, the annual tax will be determined by means of a tax assessment notice. If necessary, the advance income tax payments for the following calendar years will also be adjusted.
All changes, such as income, marital status, address, bank details, etc., you must notify the tax office without being asked.
It is important that you notify such changes to the tax office immediately. You can do this either by telephone or with a written request. This will help you avoid "unpleasant" additional payments or save you from having to make excessive advance payments.
If you stop working as a cross-border commuter, you should also inform the tax office immediately in writing. Future advance payments can then be cancelled or reduced in good time.
The border area for cross-border commuters who have their permanent residence in a municipality of the departments of Haut-Rhin, Bas-Rhin or Moselle includes, on the German side, the cities and municipalities whose territory is wholly or partially located at a maximum distance of 30 km from the French-German border.
Employees who are self-employed in Germany are subject to limited income tax liability in Germany. Their employer must therefore generally withhold wage tax on the income and pay it to the tax office. For cross-border commuters who live in the border area in France and regularly work in the border area in Germany, the employer can only waive the withholding of German wage tax if he has received an exemption certificate from the competent German tax office for this purpose. This must be applied for by the cross-border worker using form no. 5011 (for non-local workers). The application must be submitted in good time so that the employer is already in possession of the exemption certificate before the remuneration is paid out. Form No. 5011 applies only to cross-border commuters who have a permanent employment relationship with a German employer and are not temporary workers
The cross-border worker fills in Section I of the three copies of form 5011. He submits the three copies to his German employer. The employer completes section II. The cross-border worker then submits the three copies to the Chef de Centre des Impôts responsible for him in France. After issuing the certificate in Section III of the form, the latter retains the first copy. The remaining two copies are returned to the cross-border commuter. The frontier worker gives the second copy to his German employer and keeps the third copy. The German employer sends the form to the tax office to which he would have to pay the wage tax. In it, the employer asks the tax office to issue an exemption certificate within the meaning of Section 39, Paragraph 3 in conjunction with Paragraph 4, Number 5 of the German Income Tax Act (EStG). As soon as the employer receives this certificate, the wage tax deduction can be omitted for the wage payment periods specified in the certificate
The exemption certificate is generally issued for 3 years if the employer is not changed. However, the cross-border worker has the information in section II of the first copy of the form confirmed annually by the employer. He submits this to the Chef de Centre des Impôts responsible for him in France. The application must be resubmitted if the employee changes employer and also meets the conditions for the cross-border commuter scheme in the new employment relationship.
The employer may only refrain from deducting wage tax for a French cross-border commuter as long as the conditions for cross-border commuter status are recognizably fulfilled for the employer and an exemption certificate is available. If an employee exceeds the 45-day limit in the course of a calendar year, cross-border commuter status no longer applies. The employer is then obliged to withhold the wage tax that has not yet been levied for the previous wage payment periods of this calendar year with the next subsequent wage payment.
The activity of temporary workers is characterized by a frequent and in advance not determinable change of the place of employment - also outside the border zone. Therefore, it is generally not possible to predict in advance whether the temporary worker will meet the requirements of the cross-border commuter regulation. French temporary workers are therefore generally not exempted
This does not apply if there is a reasonable assumption that the French temporary worker will meet the requirements for cross-border commuter status. The French temporary worker may therefore be exempted from wage tax deduction for one year under the following conditions:
- The temporary worker submits a completed application using form N 5011 A "Cross-border workers (who are temporary workers)",
- the temporary worker worked exclusively for the same employer (lender) in the previous year. He intends to work exclusively for this employer (lender) in the current calendar year as well,
- the temporary worker met the requirements for cross-border worker status in the previous year. The employer (lender) intends to continue employing the temporary worker exclusively in the border zone in the current calendar year and
- the employer (lender) undertakes to notify the permanent establishment tax office if the employment relationship is terminated or if the temporary worker no longer meets the cross-border commuter requirements.
The temporary worker who was not exempt from income tax deduction in the past calendar year may apply for the application of the cross-border commuter regulation and the associated tax exemption from German income tax. This is only possible by submitting an income tax return for persons with limited tax liability in accordance with Section 46 (2) No. 8 EStG. This also applies to a cross-border commuter for whom wage tax was withheld by the employer despite existing cross-border commuter status because no exemption certificate was applied for at the locally competent tax office or this was denied in advance. The tax return must be accompanied by exemption applications (5011 or 5011 A for temporary workers) and a list of the places of employment during the entire calendar year.
At the beginning of your cross-border activity, you will receive a questionnaire. Please answer the questions completely and accurately. Your answers are important prerequisites for rapid processing and appropriate tax treatment.
After submitting the questionnaire, you will be assigned a tax number.
Advance payments are levied quarterly (10.03., 10.06., 10.09. and 10.12.) on the estimated annual tax (§ 37 Income Tax Act).
You will receive an advance payment notice regarding the advance payments to be made.
The direct debit procedure for payment transactions with the tax office has proved extremely successful and is recommended.
In Austria, withholding tax is waived for cross-border commuters upon presentation of the certificate of residence.
Cross-border commuters commuting from Austria will receive an exemption certificate for domestic wage tax deduction upon request.
As a cross-border commuter, you must file an annual income tax return. For your Austrian wages, please use Annex N-Gre for the relevant year.
With regard to the obligations to provide evidence and to cooperate, it should be noted that there are extended obligations to cooperate in the case of foreign matters (Section 90 (2) of the German Fiscal Code). Required documents and information must therefore already be submitted in full with the tax return.
Once the processing of your tax return has been completed, the annual tax will be determined by means of a tax assessment notice. If necessary, the advance income tax payments for the following calendar years will also be adjusted.
All changes, such as income, marital status, address, bank details, etc., you must notify the tax office without being asked.
It is important that you inform the tax office of such changes immediately. You can do this either informally by telephone or with a written application. This will help you avoid "unpleasant" additional payments or save you from having to make excessive advance payments.
Please inform the tax office immediately if you terminate your cross-border activity. You should do this in writing. Future advance payments can then be cancelled or reduced in good time.