Sending employees abroad: What Zurich companies need to consider

Sending employees abroad affects more and more Zurich companies that are growing internationally. Questions quickly arise about social security, taxes and reporting requirements in the target country. KKT Zurich GmbH shows the most important points so that an international assignment runs smoothly for companies and employees.

Social insurance: The A1 certificate

Anyone who sends staff to an EU or EFTA country can leave the employees in Swiss social security instead of re-insuring them in the target country. The one necessary for this A1 certificate confirms to foreign authorities that Swiss law continues to apply during the deployment. The standard duration of a posting is 24 months. If that's not enough, you can use this Federal Social Insurance Office apply for an exception agreement with the destination country. Overall, in practice, the authorities usually only approve postings for a total period of 5 to 6 years. The employer submits the application to the responsible AHV compensation fund electronically via the ALPS or AHVeasy platforms.

Posting to countries without EU or EFTA agreements

There are bilateral social security agreements with Switzerland for numerous other countries. The same applies here: Extensions are usually only approved if the total posting does not exceed 5 to 6 years. If there is no agreement with the target country, employees may face double contributions - once in Switzerland and once in the host country. In such cases, KKT Zurich GmbH checks early on whether voluntary continued insurance makes sense.

Tax aspects: The 183 day rule

Whether a country of use is allowed to tax income depends on most people Double taxation agreement Switzerland is subject to three conditions: the employees stay in the target country for less than 183 days, the wages are paid by an employer without a registered office in the target country, and the costs are not borne by a permanent establishment in the target country. If all three conditions are met, the right to tax remains with Switzerland. Otherwise, the tax liability in the target country applies, although the double taxation agreement usually prevents double taxation. Our team for Tax advice check this on a case-by-case basis.

Don’t forget the reporting requirements in the destination country

The EU Posting of Workers Directive does not apply directly to Switzerland as a third country. Nevertheless, many EU countries require foreign service providers to register posted employees in advance, for example via national online portals. Which report is required varies considerably from country to country. KKT Zurich GmbH will clarify this together with local partners before the start of the operation.

Employment law protection

For the posting, we recommend an additional agreement to the existing Swiss employment contract. It regulates the duration, remuneration, expenses, insurance coverage and the return conditions after the end of the assignment. This means that the Swiss employment relationship remains in effect throughout the entire posting.

Frequently asked questions about sending employees abroad

How long can a posting to another EU or EFTA country last?

Regularly 24 months. If necessary, an extension can be applied for through the Federal Social Insurance Office, usually for a total period of 5 to 6 years.

What is an A1 certificate and who applies for it?

It confirms that posted employees remain covered by Swiss social security during their assignment abroad. The employer applies for it to the responsible AHV compensation fund.

Do I have to pay taxes in the destination country?

This depends on the 183-day rule in the respective double taxation agreement. If the deadline is exceeded or a local establishment bears the costs, a tax liability usually arises in the target country.

What happens if there is no social security agreement with the destination country?

Then there is a risk of double contributions in Switzerland and in the host country. KKT Zurich GmbH examines alternatives such as voluntary continued insurance at an early stage.

Plan to send employees abroad with KKT Zurich

KKT Zurich GmbH supports companies and employees when sending employees abroad - from the A1 certificate to the tax assessment and employment law protection. Contact us at +41 44 566 79 79 or info@kkt-zuerich.ch, or Arrange an initial interview about the posting straight away.