– October 10, 2023

Home office and taxes

In recent years, working from home has become increasingly popular for both employees and employers. This raises new questions related to taxes. The tax consequences of working from home.

The home office as a permanent establishment?
If a permanent establishment exists under tax law, the employer becomes liable for tax at the place where the home office is located and must pay tax there on a share of the company’s profits. A permanent establishment under intercantonal tax law requires a fixed and permanent facility where a substantial part of the business activity takes place. However, the home office does not normally meet these criteria. It lacks permanence, materiality and power of disposal. The home office is not perceived as a fixed facility and the work there does not normally have a substantial business impact. The lack of permanence and the low quantitative significance of working from home mean that there can be no question of a permanent establishment. The employer also lacks a right to use the premises because they are not offices of the company.

The actual administration
The place of actual administration of legal persons is decisive for the tax affiliation to a canton (BGE 45 I 190). This place depends on the conduct of current business. In the case of large companies, the place of actual administration usually remains unchanged even through working from a home office, since most business activities are managed from fixed locations. However, for smaller companies, the home office of the key decision-maker may affect the place of effective management. However, the impact depends on the size and structure of the company. In principle, however, working from an employee’s home office does not usually lead to a shift in the actual administration.

Working from home – second home owner or weekly resident
The tax residence of individuals depends on personal, family and social relationships. Typical second home owners continue to have their centre of life at their primary residence. The home office at the second home can strengthen the relationships, but does not necessarily lead to a shift of the centre of life. 
Similar considerations apply to weekly residents, although weekend residence is usually considered a priority as long as it is regular and personal relationships exist. However, home office days at the weekend location can influence the place of actual administration. As a general rule, the overall circumstances must always be taken into account.

Overall, it can be said that the tax effects of the home office in the intercantonal context are very complex and depend on many different factors. Uniform regulations exist only sparsely and a final assessment must always be made on the basis of the individual circumstances and the respective size of the company or person. It is advisable to clarify the tax aspects in connection with the home office in advance.

If you have any questions in tax law, our lawyers will be happy to advise you.