Taxes for Cross-Border Workers in Switzerland: A Complete Guide (2025)

Switzerland is an attractive destination for cross-border workers due to its strong economy and high salaries. However, taxation can be a complex topic, especially as tax rules vary depending on whether you live in France, Italy, or Germany.

This guide explains everything you need to know about cross-border taxation in 2025, including where you pay taxes, how to avoid double taxation, and which tax deductions may apply.

Table of Contents

1. Where Do Cross-Border Workers Pay Taxes?
2. Taxation Rules for Each Country
3. What’s New for Cross-Border Taxation in 2025?
4. What Exchange Rate Should You Use?
5. How to Save Money on Currency Exchange
6. Conclusion: How to Handle Cross-Border Taxes in 2025

Where Do Cross-Border Workers Pay Taxes?

Your tax situation depends on three main factors

• The Swiss canton where you work
• Your country of residence (France, Italy, or Germany)
• Your employment status (salaried employee, freelancer, or retiree)

Each country has a tax agreement with Switzerland, determining where and how cross-border workers are taxed. The table below summarizes the tax rules by country:

📌 Important: If you are taxed in Switzerland, you may need to fill out forms in your home country to prevent double taxation.

Taxation Rules for Each Country

France: How Cross-Border Workers Are Taxed

• If you work in Geneva, Switzerland taxes your salary at source. However, you must still declare your income in France, where a tax credit cancels out the Swiss tax.
• If you work in other Swiss cantons (Vaud, Valais, Jura, etc.), you are fully taxed in France and need to report your Swiss salary to the French tax authorities.
• You must fill out form 2041-AS in France to avoid double taxation.

📌 Tax Tip: If you work in Geneva, you may qualify as a quasi-resident (if 90% of your income is Swiss) and apply for deductions such as transport costs, mortgage interest, and pension contributions.

Italy: Dual Taxation for New Cross-Border Workers

The new tax agreement (since July 17, 2023) divides cross-border workers into two categories:

1. Old cross-border workers (hired before July 17, 2023) are only taxed in Switzerland.
2. New cross-border workers (hired after July 17, 2023) pay taxes in both Switzerland and Italy, with a tax credit to avoid double taxation.

How the Italian Tax System Works for Swiss Workers

• Swiss Tax: You pay a reduced Swiss tax at source (usually 4.5%-10% depending on income and canton).
• Italian Tax: Your income is also subject to IRPEF, the progressive Italian income tax. However, a tax credit is applied for Swiss taxes already paid.
• Tax-Free Allowance: Italy grants a €10,000 tax-free income threshold for new cross-border workers.

📌 Tax Tip: The exchange rate for tax declarations is the official annual average set by Italian tax authorities, not your bank’s rate.

Germany: Full Taxation in Germany

Germany follows a double taxation agreement with Switzerland:

• Switzerland withholds 4.5% of your salary as a tax at source.
• Your salary is fully taxed in Germany, but the Swiss tax is credited against your German income tax.
• German tax rates range from 14% to 45%, depending on your total income.

Key Forms for German Taxpayers:

• Anlage N-Gre: Used to declare Swiss income in Germany.
• Anlage Vorsorgeaufwand: Used to deduct Swiss social security contributions.

💡 Good to Know: Germany does not have a tax-free income threshold for cross-border workers. However, commuting costs and pension contributions can reduce taxable income.

What’s New for Cross-Border Taxation in 2025?

Changes You Need to Know

• Italy now taxes new cross-border workers in both countries (since July 2023).
• France still applies tax exemptions but requires an annual declaration of Swiss income.
• Germany maintains a strict taxation system, but deductions can lower tax burdens.
• Home-office rules: A certain % of workdays can be remote without affecting cross-border tax status.
  As an example, it is up to 40% for cross-border workers living in France.

Example

If you work in Switzerland four days a week and one day remotely in Italy, France, or Germany, your tax status remains unchanged.

However, if you work more than 25% remotely from Italy, or 40% remotely from France, your salary may become fully taxable in your home country.

What Exchange Rate Should You Use?

When declaring Swiss income in your home country, you must convert CHF to EUR using the official exchange rate determined by tax authorities.

📌 Tip: Do not use your bank’s conversion rate for tax declarations! Instead, check your country’s official exchange rate for the tax year.

How to Save Money on Currency Exchange

Cross-border workers often receive their salary in CHF but pay expenses in EUR. However, banks typically apply high fees and unfavorable exchange rates, reducing your take-home pay.

🎯 Smart exchange tip: Instead of letting your bank handle conversions at poor rates, use a specialized service like ibani for better conditions:

• Real market exchange rate with a low 0.40% margin, compared to 1-3% at traditional banks.
• Fast and secure transfer to your EUR account, with no hidden fees.
• Swiss IBAN that you can provide to your employer, ensuring direct salary deposits in EUR.
• No tax declaration required for ibani, as it is not a bank account.

Optimize your currency exchange with ibani and save on CHF to EUR transfers!

You send

CHF

• CHF
• EUR
• USD
• GBP
• CAD
• SGD

SELLEUR xxx

xxx BUYEUR

You receive

EUR

• CHF
• EUR
• USD
• GBP
• CAD
• SGD

• Our transfer fees: CHF 0
• Our exchange margin: 0.50%
• Final exchange rate: 1.1636
• You'll save on average maintenant

Conclusion: How to Handle Cross-Border Taxes in 2025

• Identify your tax status based on your residence and employment location.
• Understand double taxation agreements to avoid paying more than necessary.
• Use the correct exchange rate when declaring Swiss income.
• Optimize your currency exchange to save money on transfers.
• Meet tax deadlines to avoid penalties.

💬 Need help? If you're unsure about your taxes, consult a cross-border tax expert to get the best advice for your situation.

This article is for informational purposes only and does not constitute tax advice. Tax rules may change, so always check with an expert or local tax authorities.