We from the south-west have known this for a long time and have had good economic relations with Switzerland for a long time (cf. IHK statistics 2025: Switzerland ranks second among foreign trade partners) Germany, however, is also the centre of Most important trading partners Switzerland. The close economic ties therefore lead to a lively exchange of specialised personnel. In addition to well-known blue chips, there is an increasing number of globally positioned SMEs that rely on qualified personnel in both countries.
The intra-group utilisation of skilled personnel in the relationship between Switzerland and Germany raises complex tax and social security issues. Together with Adrian Briner, Briner Tax Advisory AG has Dr Tobias Stiegler a technical article in ZSIS and discusses six typical case constellations on the basis of practical examples. The effects of the latest legal changes are highlighted: the new domestic legal basis for executive employees (Art. 5 para. 1 lit. abis DBG), the revised double taxation agreement between Switzerland and Germany and the OECD Model Commentary 2025 on the home office permanent establishment.
The facts of the case
A Swiss holding company in Basel has a German subsidiary in Munich, which employs a specialised employee. This specialist employee is so good that the Swiss holding company also wants to use him. The employee continues to rise in the hierarchy and becomes CEO of the Swiss holding company, and later also a member of the administrative or supervisory board. It goes without saying that the new world of work would be unthinkable without the home office.
This simple-sounding and realistic issue is full of pitfalls and legal questions. This is because the intra-group utilisation of skilled personnel across the Swiss-German border regularly raises complex tax and social security issues in practice, which have become even more relevant as a result of several recent legal changes.
Principles of taxation
Swiss holding company: In practice, the Swiss holding company usually has the legal form of a corporation, i.e. a public limited company (AG) or a limited liability company (GmbH) and is taxed according to the principles for legal entities. As its registered office and actual management are located in Switzerland in the case under discussion, it establishes a personal affiliation here and is subject to unlimited tax liability in Switzerland.
Specialised personnelIf the professional is resident in Switzerland, they are subject to unlimited tax liability in Switzerland, which means that their entire income from employment is generally taxed in Switzerland. The net income from employment is taxable; costs incurred in exercising the profession can be deducted, taking into account the statutory flat rates. Taxes are assessed using the ordinary procedure or, if the professional is resident in Switzerland but does not have a permanent residence permit, tax is assessed using the withholding tax procedure.
A professional resident abroad is only subject to tax in Switzerland to a limited extent on the income components that are taxable due to their economic affiliation to Switzerland, provided that certain criteria are met.
If the qualified personnel live in Germany and have their centre of life there, they are subject to unlimited income tax liability in Germany on their global income. The taxation of global income means that all domestic and foreign income of a person with unlimited tax liability is subject to taxation in accordance with national law. Insofar as natural persons who are neither domiciled nor ordinarily resident in Germany are subject to limited income tax on their domestic income within the meaning of Section 49 of the German Income Tax Act (EStG), they are subject to limited income tax. § Section 49 EStG are subject to limited income tax liability (Section 1 (4) EStG).
German subsidiary: The taxable entity is the subsidiary with its registered office and place of management in Germany, which typically has the legal form of a corporation (GmbH) or partnership (GmbH & Co. KG). Since Swiss legal practice unilaterally hardly uses and recognises partnerships, a corporation is more likely. However, partnerships also have their Advantages (see TXGT blog from 15/07/2025).
The corporation is an independent legal entity and taxable entity. Pre-tax profits are currently taxed at a rate of EUR 151 thousand corporation tax plus a solidarity surcharge of EUR 5.51 thousand, combined EUR 15.825 thousand, and trade tax, the rate of which varies between a minimum of EUR 71 thousand and generally around EUR 151 thousand, depending on the municipal assessment rate.
Partnerships are also taxable entities for trade tax purposes. Taxation with income tax or corporation tax takes place at shareholder level (so-called transparency principle), whereby trade tax can be offset for natural persons within the limits of Section 35 EStG.
The case constellations
The following case studies are discussed and explain how the tax situation at the respective Group company is assessed and what tax and social security implications may arise for the employee:
- Initial situation: Employment at German subsidiary in Munich, residence in Munich
- Change to Swiss company, weekly resident in Basel, resident in Munich
- Promotion to CFO with power of attorney for the Swiss holding company
- CFO moves from Munich to Freiburg
- CFO becomes CEO and member of the Board of Directors of the Swiss holding company
- CEO retires, becomes an independent consultant and remains a member of the Board of Directors
Conclusion
International tax and social security law creates complex case constellations that need to be analysed on a case-by-case basis. Forward-looking planning is essential for international companies in order to implement and maintain a robust tax and social security structure for themselves and their key employees/management staff. This is the only way to avoid risks and, in particular, real double taxation scenarios. The following applies: the higher the function of the specialist within the group and the greater the proportion of work from home, the more complex the overall tax and social security picture becomes. Your TAXGATE Team stands for proactive consulting for medium-sized companies in the implementation and ongoing support of tax-efficient structuring considerations.
