Swiss Tax – The One Pager

Important provisions of the AIALG

In the event that an international treaty provides for the exchange of salary data, the employer is required to transmit this information to the relevant cantonal tax authority on an annual basis. The information to be reported includes the surname and first name of the person, date of birth, place of residence, calendar year in which the income is earned, number of homeworking days or percentage of teleworking, as well as the total remuneration (Art. 3 AIALG).

Furthermore, employers are required to inform employees from the start of their employment relationship or by 28 February of the year in which the information is first transmitted to the partner state about the applicable international agreement, the information to be exchanged, the state to which the data will be sent to, the permitted use of the data and the rights of the employee under the Swiss Data Protection Act (DPA).

The AIALG requires employers to retain documentation related to such information exchange for 10 years (by reference to Article 958f paragraph 1 Code of Obligation). Furthermore, employers are required to provide information to the Federal Tax Administration (FTA) upon request, enabling the FTA to verify the proper fulfilment of international legal obligations. Failure to comply with the employer's obligation to provide information may result in a fine of up to CHF 1’000 (in serious cases or in the event of recidivism, up to CHF 10’000).

Should a data protection breach occure employees have the right to invoke the provisions of the DPA in their dealings with the FTA. This entitles them to information and rectification in the event of transmission errors. The DPA also applies in relation to the employer and regarding the cantonal tax authorities, the cantonal data protection provisions also apply.

Key take-aways

• It is the responsibility of the employer to provide the cantonal tax authorities with the relevant salary data.
• The first exchange of salary data with Italy will take place in 2025, followed by France in 2026.
• It is therefore crucial for employers to implement a system for the correct provision of salary data in due time. They must provide detailed information regarding the number of days an employee works for the employer via teleworking and the number of days spent travelling for the employer on business.