Every day, more than 100,000 cross-border workers carry out their professional activities in the Canton of Geneva. Under Geneva law, they are subject to withholding tax. In other words, they pay their taxes in Geneva, not in France.
In fact, there are international agreements designed to prevent a person with ties to multiple countries from being taxed multiple times (by different tax authorities) on the same income. Since cross-border workers pay their income taxes in Geneva, they do not pay income tax in France, where they and their families live. Public authorities—the Canton of Geneva on the one hand, and French municipalities and departments on the other—naturally incur costs associated with the presence of these workers on their territory, whether as workers (in Geneva) or as residents (in France). And only the authorities of the place of employment are able to levy a tax to cover these costs.
Faced with the costs incurred by cross-border workers without receiving any tax revenue from their presence, the mayor of Viry contacted the Geneva authorities in the early 1970s to seek a sharing of tax revenue. And so, in 1973—50 years ago today—the Agreement on Financial Compensation for Cross-Border Workers was born. Under this Agreement, the Canton of Geneva paid 343 million Swiss francs to France for the year 2022. This represents 3.5% of a total payroll of nearly 10 billion Swiss francs.
This agreement, unique in the world, has shaped the economy, the regions, and even the institutions of Greater Geneva for the past 50 years. This symposium was dedicated to examining the origins, content, and consequences of fifty years of implementing this Agreement.
Claude Haegi, President of FEDRE, participated in the roundtable discussion titled “The 1973 Agreement in Perspective,” alongside Robert Borrel, mayor of Annemasse from 1977 to 2008 and former President of the ARC, Robert Cramer, a member of the Geneva State Council from 1997 to 2009, Virginie Duby-Muller, French Member of Parliament; Christian Dupessey, Mayor of Annemasse and President of the French Geneva Metropolitan Area; and Fabienne Fischer, Geneva State Councilor.
It should be noted that FEDRE was behind a major draft recommendation on cross-border taxation adopted by the Council of Europe on October 29, 2019.
Report CG37(2019)10 Final: Fair Tax Allocation in Cross-Border Areas
