Working in Multiple Countries: Tax Challenges for Mobile Expats

With remote work, international projects, and frequent job changes, it is increasingly common for expats to work in multiple countries. This often occurs through secondments, international contracts, or the flexibility to work from anywhere. However, this mobility brings complex tax questions: In which country am I liable for taxes? How is income allocated? And how can double taxation be avoided?

This article highlights the main tax challenges for mobile expats and explains how to plan ahead to avoid unpleasant surprises.

Tax Residency as a Fundamental Question

Residency in Switzerland

A person is considered a tax resident in Switzerland if they:

• Have their permanent residence in Switzerland, or
• Stay in Switzerland for at least 30 days with employment, or 90 days without employment.

Multiple Residencies

Expats who are simultaneously active or maintain residences in multiple countries can theoretically be considered tax residents in more than one state. In such cases, double taxation agreements (DTAs) help determine the country of residence clearly.

Income from Multiple Countries

Principle

Employment income is taxed in the country where the work is actually performed. Therefore, if part of the work is done in Switzerland and part abroad, income must be allocated.

Proportional Allocation

Allocation is usually based on workdays.
Example: An expat works 200 days in Switzerland and 60 days in Germany. Income is allocated proportionally at 200:60.

Remote Work and Home Office

If an expat works remotely from their home country for a Swiss employer, part of the income may be taxable in the home country – especially if this creates a permanent establishment for the employer.

Double Taxation Agreements and Mobile Expats

Avoiding Double Taxation

DTAs determine which country can tax income and to what extent. Generally:

• The country where the work is performed has the primary right to tax.
• The country of residence either credits the foreign taxes paid or exempts the foreign income.

Special Rules for Cross-Border Commuters

Expats who regularly commute between two countries are subject to special cross-border rules (e.g., between Switzerland and Germany, France, or Italy).

Social Security for Activities in Multiple Countries

EU/EFTA Expats

Under the Free Movement of Persons Agreement, expats are subject to social security in only one country. Which country depends on where the majority of work is performed.

Non-EU Expats

Bilateral agreements with third countries work similarly. Without such agreements, there is a risk of double contributions if social security is payable in both countries.

Practical Examples

Example 1: Project Work in Two Countries

An Indian expat works for a year at a company in Zurich but spends three months on the same project in Italy. Their income is allocated between both countries.

Example 2: Remote Work from Abroad

A British expat works for a Swiss employer but lives several months in the UK. The UK tax authority may tax part of the income because the work is physically performed in the UK.

Example 3: Cross-Border Commuter Rule

A German engineer lives in Konstanz and works four days a week in Zurich. They are subject to the special cross-border commuter rules between Germany and Switzerland.

Common Mistakes and Tips

Common Mistakes

• Failing to document workdays in foreign countries.
• Assuming all income is taxed only in the country of residence.
• Overlooking social security obligations in multiple states.
• Ignoring DTAs for cross-border commuters and home office work.

Tips for Mobile Expats

• Keep a detailed log of workdays in each country.
• Verify in advance which country has the right to tax.
• Clarify social security obligations with your employer.
• Seek professional tax advice early to avoid additional taxes or double taxation.

Conclusion

Increasing mobility offers professional opportunities for expats but also brings significant tax challenges. Income often needs to be split between countries, DTAs must be considered, and social security obligations play a central role.

With careful documentation, timely planning, and professional advice, mobile expats can fulfill their tax obligations while avoiding unnecessary burdens.