The automatic exchange of information is entering a new phase in Switzerland with the transmission of salary data abroad. For employers concerned, this new framework entails additional obligations regarding the collection and transmission of information relating to certain employees.
The Federal Act on the International Automatic Exchange of Information on Salary Data (LEADS), which will enter into force on 1 January 2027, provides the legal basis required for the implementation of this automatic exchange of information. To date, Switzerland has concluded agreements providing for such an automatic exchange of information with France and Italy.
In this article, we provide practical answers to the main questions raised by this new automatic exchange of information, distinguishing between the rules applicable to France and those applicable to Italy.
What is the automatic exchange of information on salary data?
The automatic exchange of information on salary data is a mechanism that enables Switzerland to periodically transmit certain information relating to employment income to a partner country, without that country having to request the information on a case-by-case basis.
This new automatic exchange of information is based on the LEADS, which sets out the rules governing the collection and transmission of salary data where an international agreement concluded by Switzerland provides for such an exchange. The data exchanged notably enables the country of residence to apply the tax regime provided for under the relevant international agreements and to verify the consistency between the income declared by the employee and the information transmitted by the authorities of the other country.
It should be distinguished from the automatic exchange of information relating to financial accounts (AEOI), which has already been in force in Switzerland for many years. While the latter concerns, in particular, information relating to financial accounts, the automatic exchange of information discussed here specifically concerns salary data.
To date, Switzerland has provided for the automatic exchange of information on salary data with France and Italy, under arrangements that differ between the two countries.
When does the automatic exchange of information on salary data come into effect?
It should be noted that the automatic exchange of information between the authorities does not take place in real time. Rather, it is an annual exchange carried out electronically on the basis of data relating to the previous tax year.
With regard to France, the automatic exchange of information on salary data already covers the 2026 tax year. Since 1 January 2026, the employers concerned have therefore been required to collect the information necessary to prepare the salary data certificate.
The first transmission will cover data for 2026 and must be submitted to the competent cantonal tax authority by 28 February 2027 at the latest. Thereafter, employers will likewise have until 28 February of the year following the relevant tax year to submit their certificates.
In the Canton of Vaud, for example, the various channels for transmitting these data will be available from 1 January 2027.
In Geneva, employers will also be able to use Swissdec-certified payroll software, the ISeL online tax services or the official paper forms. For the transmission of data relating to remote working via Swissdec, version 5.3 or later is required. The first transmission of data relating to 2026 will take place in January 2027.
It is therefore important to bear in mind that the obligation applies to salary data for 2026, even though the first transmission of those data will take place in 2027.
With regard to Italy, the automatic exchange of information on salary data is already applicable. The new Agreement between Switzerland and Italy on the taxation of cross-border workers has been in force since 1 January 2024 and provides for the automatic and reciprocal exchange of salary data required for the taxation of the workers concerned.
In practice, employers are therefore already collecting the information required for this exchange. In the Canton of Ticino, for example, employers were required to submit data relating to 2024 to the cantonal tax authority by 31 January 2025 at the latest.
The data are then exchanged electronically each year between the Swiss and Italian tax authorities. Under the arrangements agreed between the two countries, this exchange must, in principle, take place by 20 March of the year following the relevant tax year, although the requirement is deemed to have been met where the exchange takes place by 30 March at the latest.
The entry into force of the LEADS on 1 January 2027 therefore does not mark the beginning of the automatic exchange of information with Italy. Rather, it provides the legal basis under Swiss domestic law for its implementation in Switzerland.
Importantly, a distinction must be made between the deadline by which an employer must submit the data to the cantonal tax authority and the deadline applicable to the automatic exchange of information between the two countries. The deadlines and procedures applicable to employers are determined at cantonal level. At international level, however, the information must be transmitted to Italy by 20 March of the year following the relevant tax year and to France by 30 November of the year following the year in which the remuneration was paid.
Who is required to transmit salary data and to whom?
In the context of the automatic exchange of information on salary data with France, the obligation to transmit data falls primarily on Swiss employers who pay employment income to the individuals concerned.
Employers must submit the relevant certificate to the competent cantonal tax authority, determined in accordance with the territorial jurisdiction rules applicable to withholding tax.
In practical terms:
- if the employee is resident in France but stays in Switzerland during the working week in accommodation at their own disposal, the certificate must be submitted to the canton in which the employee resides during the week;
- if the employee is resident in France but does not stay in Switzerland during the working week, the certificate must, in principle, be submitted to the canton in which an employer who is a natural person is resident or staying for tax purposes or, in the case of a legal entity, to the canton in which its registered office, administration or permanent establishment is located;
- where the salary is paid by a permanent establishment located in another canton, the certificate must be submitted to the canton in which that permanent establishment is located. The same applies where the permanent establishment belongs to an undertaking whose registered office or effective management is not located in Switzerland.
The reporting obligation also extends to occupational pension institutions, insurance companies, compensation funds and unemployment insurance funds where they directly pay employees income received as compensation for loss of earnings.
In the context of the automatic exchange of information on salary data with Italy, the Swiss employers concerned must provide the competent tax authority with the necessary information relating to employees who fall within the scope of the exchange.
The practical arrangements for transmitting the information are organised at cantonal level. In the Canton of Ticino, for example, employers transmit the required data to the cantonal tax authority using the IFonte application or, depending on the payroll software used, via Swissdec.
Data intended for Italy then follow a specific transmission procedure. In accordance with the Agreement between Switzerland and Italy, the tax authorities of the three cantons concerned – Graubünden, Ticino and Valais – transmit the information directly to the Italian tax authority.
Conversely, the Italian tax authority transmits information concerning cross-border workers resident in Switzerland to the Swiss Federal Tax Administration (FTA). From 2027 onwards, the LEADS will govern, among other matters, the provision of this information to the cantonal tax authorities.
Which employees are covered by the automatic exchange of information on salary data?
The automatic exchange of information applies to individuals who are resident in France and are employed in Switzerland. Cross-border workers within the meaning of the 1983 Franco-Swiss Agreement are therefore also covered by the automatic exchange of information.
An exception applies to Swiss nationals working for a Swiss public-law employer, provided that they are not engaged in an industrial or commercial activity (for example, the State of Geneva or the Canton of Vaud, municipalities, HUG, CHUV, the University of Geneva, EPFL, etc.).
As regards Italy, the automatic exchange of information on salary data applies, first of all, to new cross-border workers, namely cross-border workers within the meaning of the new 2020 Agreement who are not eligible for the transitional regime applicable to existing cross-border workers.
To qualify as a cross-border worker for tax purposes, an employee must, in particular, reside in a municipality located within 20 km of the border, work in the border area – on the Swiss side, in the cantons of Graubünden, Ticino or Valais – and, in principle, return daily to their main residence in their country of residence.
There is, however, a degree of tolerance regarding the daily return requirement: a worker may, for professional reasons, not return to their main residence for up to 45 days per calendar year without losing their status as a cross-border worker on that basis alone. Days of holiday and sick leave are not included in this limit.
The distinction between existing and new cross-border workers is important. Existing cross-border workers are individuals who met the conditions to be treated as cross-border workers for tax purposes and who worked in Graubünden, Ticino or Valais on 17 July 2023 or at some point during the period from 31 December 2018 to 17 July 2023. They may benefit from the transitional regime provided for under the Agreement. Cross-border workers who are not eligible for this regime are considered new cross-border workers.
Existing cross-border workers who benefit from the transitional regime are not covered by the automatic exchange of information on salary data. The remuneration derived from their employment in Switzerland remains taxable exclusively in Switzerland, and the Swiss cantons concerned will continue to transfer 40% of the corresponding tax revenues to Italy until the 2033 tax year. From the 2034 tax year onwards, Switzerland will no longer make these compensatory payments and will therefore retain all of the tax revenues generated.
The automatic exchange of information on salary data also applies to workers resident in either of the two countries who do not reside within the 20 km border zone or who do not satisfy the requirement to return, in principle, daily to their main residence, taking into account the applicable tolerance.
Finally, holding a G permit is not, in itself, sufficient to determine whether an employee qualifies as a cross-border worker for tax purposes. The definition of a cross-border worker for tax purposes is distinct from the definition applicable for residence or work permit purposes.
What information must be transmitted?
As part of the automatic exchange of information on salary data with France, employers must transmit, in particular, the following information:
- the employee’s first name and surname;
- date of birth;
- residential address in France;
- AHV/AVS number;
- the calendar year in which the income was earned;
- the total gross amount of remuneration paid; and
- the percentage of remote working.
The percentage of remote working is particularly important. It must be reported even where the employee has not carried out any remote working or temporary assignments that would be taken into account in calculating this percentage. In such cases, the employer must report 0%.
As part of the automatic exchange of information on salary data with Italy, the following information is exchanged in particular:
- the worker’s first name and surname;
- date of birth;
- residential address;
- for a worker resident in Italy, their place of birth; for a worker resident in Switzerland, their place of origin;
- the tax identification number issued by their country of residence;
- the gross amount of salaries, wages and other similar remuneration;
- the amount of compulsory social security contributions paid by the worker;
- the total amount of withholding tax deducted from such remuneration; and
- the employer’s name, address and tax identification number.
For employees resident in Italy, Swiss employers must therefore collect, in particular, the Italian tax identification number (codice fiscale) and place of birth, in addition to the information normally required.
Please note: unlike the automatic exchange of information with France, the percentage of remote working is not included among the data listed in Article 7 of the Switzerland–Italy Agreement as information subject to this exchange.
What is meant by remote working?
For the purposes of the automatic exchange of information on salary data with France, remote working refers to work that could have been carried out at the employer’s premises but is instead performed remotely by the employee from their country of residence, on behalf of their employer and using information and communication technologies.
Remote working does not necessarily have to be carried out from the employee’s home. It may also be performed from a holiday home or a coworking space, provided that the location is in the employee’s country of residence.
Accordingly, an employee resident in France may work remotely from anywhere in France, and not only from their home.
As regards relations with Italy, remote working is subject to a specific rule under the Agreement on the taxation of cross-border workers.
Since 1 January 2024, a cross-border worker may carry out up to 25% of their professional activity remotely from their home in their country of residence without affecting their status as a cross-border worker or the taxation rules provided for under the Agreement. This rule applies to both new and existing cross-border workers.
The 25% rule must, however, be distinguished from the automatic exchange of information on salary data. Unlike the regime applicable with France, the percentage of remote working is not among the data subject to the automatic exchange of information under Article 7 of the Switzerland–Italy Agreement.
How should the percentage of remote working to be reported be calculated?
For the purposes of the automatic exchange of information on salary data with France, the percentage of remote working corresponds to the proportion of time spent working remotely during the year compared with the total working time during the same year.
Percentage of remote working = remote working time (including up to 10 days of temporary assignments) / total working time × 100
Employers have a certain degree of flexibility when performing this calculation. They may base it on the days, half-days or hours actually worked, depending on the nature of the employee’s activity. Where the calculation is based on days, employers may also use a simplified assumption of 240 working days per year for a full-time employee.
Certain temporary assignments carried out in France or in a third country may also be included in the percentage reported. These may include, for example, a visit to a client or supplier, an external meeting or a training day.
For a full-time employee, a maximum of 10 days of temporary assignments may be included in the calculation, provided that remote working does not, on its own, exceed 40% and that adding the temporary assignment days does not result in this threshold being exceeded. In practical terms, if the employee has already reached 40% remote working, no temporary assignment days are added. If the employee is below 40%, only the number of temporary assignment days required to reach, at most, this threshold are taken into account, subject to the maximum of 10 days. This 10-day limit is adjusted proportionately for part-time employees or employees who have worked for only part of the year.
Example: a full-time employee works remotely from France for 43 days and spends 31 days on temporary assignments outside Switzerland. Only 10 days of temporary assignments may be taken into account. The percentage to be reported is therefore 22.08%, calculated as follows: (43 + 10) / 240 × 100.
Certain specific circumstances must also be taken into account. Where an employee actually works from France for medical reasons, those days are treated as remote working days. By contrast, days of absence due to illness or accident during which no work is performed do not constitute remote working. The same applies to periods of garden leave. On-call periods are taken into account only where the employee actually performs work from France.
How should the percentage of remote working be calculated for part-time employees?
Where an employee works part-time, the number of temporary assignment days that may be included in the percentage of remote working is adjusted proportionately to the employee’s working percentage and rounded up to the nearest whole day. The same principle applies where the employee works for only part of the calendar year.
Accordingly, the maximum number of temporary assignment days is 8 days for an 80% workload, 6 days for 60%, 5 days for 50%, 4 days for 40%, and 2 days for 20%.
Example: for an employee working at 60%, the simplified basis is 144 working days per year. The 40% remote working threshold therefore corresponds to 57 days, and up to 6 days of temporary assignments may be included in the percentage of remote working, provided that the 40% threshold has not already been reached.
What happens in the case of part-time work, relocation, leaving during the year or multiple employers?
Several specific situations may affect the data to be reported as part of the automatic exchange of information on salary data with France.
Where an employee works part-time for several employers, each employer is required to report only the data relating to the working time completed within its own business.
If an employee resident in France moves to Switzerland during the year, the employer is required to report only the data relating to the period during which the employee was resident in France.
Where an employment relationship ends during the year, the certificate must cover the period from 1 January of the relevant year – or the start date of the employment relationship, if later – until the date on which the employment relationship ends.
More generally, employees must inform their employer of any change that may affect the data to be reported, including a change of name or address.
Furthermore, where an employee leaves the company before 31 December and requests it, the employer must provide the employee, in addition to the certificate relating to the automatic exchange of information on salary data, with a certificate covering the relevant circumstances prior to their departure. This certificate allows, in particular, any new employer to determine the number of remote working days and temporary assignment days already completed. It is provided solely to the employee and must not be submitted to the tax authority.
Finally, for part-time employees, the annual limit of 10 temporary assignment days that may be taken into account when calculating the percentage of remote working is adjusted proportionately to the employee’s working percentage and rounded up to the nearest whole day. Accordingly, for an employee working at 60%, a maximum of 6 temporary assignment days may be taken into account.
What happens if the remote working thresholds are exceeded?
The 40% threshold does not constitute a prohibition on working remotely to a greater extent. An employer may therefore allow an employee resident in France to work remotely for more than 40% of their working time. Exceeding this threshold may, however, have tax consequences, which vary depending on the employee’s circumstances.
For the purposes of the automatic exchange of information on salary data, the percentage of remote working actually carried out must nevertheless be reported. Accordingly, if an employee performs 50% of their work remotely, a rate of 50% must be reported in the certificate.
An important distinction applies to temporary assignments: where the percentage of remote working as such does not exceed 40%, the addition of eligible temporary assignment days cannot result in a reported percentage exceeding 40%.
For cross-border workers covered by the Switzerland–Italy Agreement, the applicable remote working threshold is 25% of total working time over the calendar year. Since 1 January 2024, a cross-border worker may perform up to 25% of their professional activity remotely from their home in their country of residence without affecting their status as a cross-border worker or the taxation regime provided for under the Agreement.
This rule applies both to new cross-border workers and to existing cross-border workers benefiting from the transitional regime.
If the 25% threshold is exceeded, the special regime governing remote working by cross-border workers no longer applies. The tax consequences must then be assessed in accordance with the relevant treaty rules applicable to the employee’s circumstances.
Unlike in the case of France, however, the percentage of remote working is not among the data subject to the automatic exchange of information on salary data provided for under Article 7 of the Switzerland–Italy Agreement.
For a detailed analysis of the tax consequences of exceeding these thresholds, please refer to our article on cross-border remote working in Switzerland.
Please note: automatic exchange of information and the tax regime are two distinct mechanisms.
The calculation of the percentage of remote working to be reported for the purposes of the automatic exchange of information on salary data should not be confused with the determination of the tax regime applicable to the employee. The two mechanisms are, however, closely linked.
In this respect, before considering the tax consequences of remote working, it is first necessary to determine which tax regime applies to the employee.
Cross-border workers who meet the requirements of the Franco-Swiss Agreement of 11 April 1983 benefit from the special tax regime applicable in the cantons of Bern, Solothurn, Basel-Stadt, Basel-Landschaft, Vaud, Valais, Neuchâtel and Jura.
Employees resident in France who do not fall within the scope of that Agreement – in particular, employees working in Geneva – are subject to the rules of the Franco-Swiss Double Taxation Convention (DTC).
Once the applicable regime has been identified, the tax rules governing remote working must be considered. Under both regimes, the agreements concluded between Switzerland and France allow, subject to certain conditions, remote working for up to 40% of the employee’s working time.
Certain temporary assignments carried out in France or in a third country may also be treated as remote working. For a full-time employee, this tolerance is limited to 10 days per year and may only be used to the extent permitted by the 40% threshold. Remote working as such is counted first, after which temporary assignment days may be added up to the remaining available limit.
For cross-border workers covered by the 1983 Agreement, an additional rule must be taken into account: the annual tolerance of 45 days on which the worker does not return to their country of residence. This rule interacts, in particular, with temporary assignments carried out in third countries and does not constitute an additional remote working allowance.
These rules determine the tax treatment of the employee’s remuneration. The automatic exchange of information serves a different but complementary purpose: it enables certain data required for the application and verification of these rules to be transmitted to the tax authorities, including the percentage of remote working.
Accordingly, the percentage of remote working reported as part of the automatic exchange of information does not, in itself, determine the tax treatment of the employee’s entire remuneration, nor does it necessarily correspond to all days actually worked outside Switzerland. It is calculated according to a specific definition that includes remote working carried out from the employee’s country of residence and, subject to certain conditions, a limited number of temporary assignment days. Assignments that cannot be included in this calculation must nevertheless be considered separately when determining their tax treatment.
For further details on the tax consequences of remote working and the interaction between the 40% threshold, the 10-day limit and, for workers covered by the 1983 Agreement, the 45-day non-return tolerance, please refer to our article on cross-border remote working in Switzerland, as well as the agreements and practical guidance published by the Swiss Federal Tax Administration.
How should salary data be transmitted?
The practical arrangements for transmitting the data required for the automatic exchange of information on salary data are determined at cantonal level. In the Canton of Vaud, for example, from 1 January 2027 employers will have three options for submitting the data to the Cantonal Tax Administration (ACI):
- using Swissdec-certified payroll software;
- via the online data entry portal provided free of charge by the ACI; or
- using the official paper form, which must be returned to the ACI by post.
Regardless of the method used, the certificate must reach the ACI by 28 February of the year following the relevant tax year. The first submission, relating to salary data for 2026, must therefore be made by 28 February 2027 at the latest.
Please note: the certificate must always be submitted to the competent cantonal tax authority, and not to the municipalities or the Swiss Federal Tax Administration.
Please note: this submission is separate from existing obligations relating to withholding tax or, for cross-border workers covered by the 1983 Agreement, the determination of the gross payroll and the submission of certificates of tax residence.
Please note: a copy of the salary data certificate must also be provided to the employee.
As regards Italy, the practical arrangements for transmitting the data are likewise organised at cantonal level. In the Canton of Ticino, for example, the employers concerned submit the required data to the cantonal tax authority using the IFonte application or, depending on the payroll software used, via Swissdec.
The deadlines applicable to employers must be distinguished from the deadline governing the automatic exchange of information between the Swiss and Italian tax authorities. In Ticino, for example, employers were required to submit data relating to 2024 to the cantonal tax authority by 31 January 2025 at the latest.
The information is then transmitted directly to the Italian tax authority by the tax authorities of the three cantons concerned, namely Graubünden, Ticino and Valais. The Agreement provides that this electronic exchange must take place by 20 March of the year following the relevant tax year. Under the mutual agreement concluded between the competent Swiss and Italian authorities, however, this requirement is deemed to have been met where the exchange takes place by 30 March at the latest.
Employers must also inform the employees concerned that their data will be exchanged. This information must be provided at the beginning of the employment relationship or, at the latest, by 28 February of the year in which data relating to the employee are transmitted to the partner country for the first time. The information provided must cover, in particular, the applicable international agreement, the categories of data exchanged, the country to which the data are transmitted, the purposes for which the data may be used, and the employee’s rights in relation to data protection.
Finally, employers must retain the information and supporting documents collected for the purposes of the automatic exchange of information on salary data. This record-keeping requirement makes it possible, in particular, to correct inaccurate data at a later stage and to ensure the correct taxation of the employees concerned.
If information that has already been transmitted proves to be inaccurate and requires correction, the employer must provide the corrected data to the competent cantonal tax authority. The corrected information is then retransmitted to the partner country in accordance with the procedure laid down in the applicable agreement.
What are the penalties for failing to comply with the obligations relating to the automatic exchange of information on salary data?
Failure to comply with the obligations relating to the automatic exchange of information on salary data may result in criminal penalties.
An employer who, despite having received a formal notice, intentionally fails to comply with its statutory obligations – in particular by failing to submit the required certificate or by submitting a certificate that is incomplete or inaccurate – may be fined up to CHF 1,000. In serious cases or in the event of repeated offences, the fine may be increased to CHF 10,000.
The legislation therefore does not, on this basis, penalise a mere error or negligence: an intentional breach following a formal notice is required.
Finally, where the same breach also constitutes a failure to comply with the procedural obligations laid down in the Federal Direct Federal Tax Act (Article 174(1)(b) FDTA), in particular as regards the submission of certificates that the employer is required to provide to the tax authority, only the penalty provided for under the latter legislation applies.
The prosecution and adjudication of these offences fall within the remit of the Swiss Federal Tax Administration (FTA), in accordance with the rules of the Federal Act on Administrative Criminal Law.