Brief updates on the regulation on cross-border workers with Germany
In future days spent working from home will not count adversely as non-return days
An amendment of the current regulation on cross-border workers pursuant to Article 15 para. 6 double taxation agreement Germany (DTA) will bring easements regarding working from home activities as of 1 January 2024 and thereby do justice to changed forms of work since the COVID-19 pandemic.
Cross-border workers are persons who are employed or self-employed in one member state and live in another member state to which they generally return every day. It must be observed that the place of work and the place of residence must be located close to the border (within a border area of 30 km linear distance). Due to the close relationship to the state of residence, Article 15 para. 6 DTA Germany regulates that salaries, wages and similar remunerations of cross-border workers are to be taxed in the state of residence and not in the state of assignment, thus deviating from the general rule of Article 15 para. 1 DTA Germany.
Days on which cross-border workers do not commute back from the place of work to the place of residence, as well as days on which cross-border workers do not even commute to the place of work (among other days spent working from home at the place of residence or days spent working remotely in non-EU member states) counted adversely as non-return days. With Germany a tolerance limit of 45 days counting adversely as non-return days was agreed (or 20% of the actual working days if employment is commenced during the year). If this tolerance limit is exceeded, the taxable person is no longer considered a cross-border worker.
The update on the regulation on cross-border workers planned within a consultation agreement will allow for working and living within the border area without the need for daily commuting. Thus, (unlike previously regulated) annual leave days and sick leave days as well as days spent working from home will no longer be considered for the tolerance limit of 45 days. Only activities performed outside of the border area are relevant for the tolerance limit of 45 days (among other days spent remotely working from non-EU member states).
In addition to the 45 days, during the calendar year a maximum of 20% of the actual working days may be performed outside of the border area. Thereby, in cases of moving to a state or moving from a state during the year, switching to a new employer or part-time employment, the application of the tolerance limit of 45 days on a proportionate basis is ensured.
The term “close to the border” includes municipalities which territory lies wholly or in part in an area of 30 km each on both sides of the border. In order to avoid differences in dimensioning regarding the 30 km border area in future, a list of the municipalities within this border area will be included in the consultation agreement.
Clarification on the return requirement regarding on-call services
The Austrian Supreme Administrative Court (VwGH) has clarified in its decision (VwGH 21/6/2023, Ro 2021/15/0036) that a 24-hour-shift including on-call service at the place of assignment does not count adversely as non-return day within the meaning of the DTA.
The doctor of a German hospital affected by this decision, whose place of work and place of residence where less than 30 km apart and therefore within the border area, initially was of the opinion not to be considered a cross-border worker and therefore not being subject to taxation in Austria. In justifying this opinion, the doctor explained that she did not return to her place of residence in Austria for more than 45 days among others due to her 24-hour-shifts.
Following the Austrian Federal Financial Court (BFG) the VwGH has decided that a 24-hour on-call service lasting overnight followed by immediately commuting back to the place of residence does not fulfil the criterion of an adverse non-return day. In justifying this decision, the VwGH explained that daily commuting back pursuant to Article 15 para. 6 DTA Germany is to be interpreted as “per working day”. A doctor’s working day regularly exceeds one day or exceeds standard working time. Staying overnight at the place of work due to on-call service does therefore not count adversely as not-returning. The VwGH also defined minor exceeding of the 24-hour on-call service due to preparation or follow-up work as not adversely. If a normal day duty follows the 24-hour on-call service this clearly exceeds a standard working day, thereby fulfilling the criterion of an adverse non-return day.
Subsequently, BFG and VwGH have confirmed the application of the regulation on cross-border workers for the doctor for lack of more than 45 days counting as adverse non-return days.
It is to be expected that this decision does not only apply to the occupational group of doctors but will apply to all occupational groups having 24-hour shifts.
