Cross-Border Employees: Switzerland Activates Automatic Salary-Data Exchange from 2027

Executive Overview

On 19 August 2026 the Federal Council decided that the Federal Act on the International Automatic Exchange of Information on Salary Data enters into force on 1 January 2027. The act provides the domestic legal basis for the exchange of information foreseen in Switzerland's arrangements with Italy and France concerning cross-border workers. For employers, the change is less about a new obligation than about the visibility that automatic exchange creates.

Where payroll records, declared residence, work location and remote-working practice do not tell a consistent story, the inconsistency becomes easier for the authorities of both states to identify. The preparation required is therefore documentary and organisational rather than structural.

Regulatory Background

For Italy, the relevant cross-border commuter agreement has applied since 1 January 2024 and provides for the reciprocal exchange of the information needed to tax commuters in their state of residence. For France, the arrangement on remote working has applied since 1 January 2026 and likewise requires the exchange of the information needed for the taxation of employees who live in one state and work for an employer in the other.

The 2027 act does not itself change the allocation of taxing rights; it operationalises the exchange of the data on which that allocation depends. This distinction matters: the substantive treatment of a cross-border employee continues to follow the applicable agreement, while the new framework determines how systematically the underlying facts are shared.

Why It Matters

The practical exposure sits with employers and with employees whose working pattern has changed since the arrangements were concluded.

• Swiss employers with commuting or remote-working staff resident in Italy or France, where payroll treatment depends on facts that must now be evidenced.
• Companies that adopted flexible or hybrid working after the arrangements entered into effect, without revisiting the payroll consequences.
• Foreign groups with Swiss operations, where HR, payroll and tax functions sit in different entities or jurisdictions.
• Employees and their families, for whom an inconsistent record can lead to enquiries in both states.
• Family offices and entrepreneurs employing staff across the border in smaller structures without a dedicated payroll function.

Practical Issues to Review

1. 01Reconcile payroll master data with declared residence and with the addresses held in HR systems.
2. 02Record work location systematically, including the treatment of days worked from the state of residence.
3. 03Document remote-working arrangements in employment contracts or policies, so that practice and paperwork agree.
4. 04Verify that the payroll position applied matches the arrangement relied on for each employee category.
5. 05Align internal mobility policies, employee communications and tax withholding on a single set of facts.
6. 06Establish who is responsible for updating the record when an employee moves, changes role or changes working pattern.

TCC View

TCC treats 2026 as a reconciliation year. Automatic exchange rewards employers whose HR, payroll and tax records agree with each other, and exposes those whose records were maintained independently for different purposes.

In our experience the most common weakness is not an incorrect tax position but an undocumented one: the treatment applied is defensible, yet the evidence supporting it was never assembled. A preventive reconciliation, completed before the first exchange cycle, materially reduces the likelihood of subsequent queries in either state.

Planning Note

Entry into force is set for 1 January 2027, which leaves a defined preparation window. Employers should complete the data reconciliation and documentation work during 2026 and monitor any further guidance on the scope and format of the exchange. Where a working pattern has changed materially, the position should be reviewed before the first reporting period rather than corrected afterwards.