Workshop by Sandro Di Giulio and Alain Friedrich at the ISIS) seminar on November 16, 2022 entitled "Pitfalls with mobile employees and global employee participation programs"
Note: This language version is an automatically generated translation. The text may therefore contain linguistic and terminological errors.
view in original language (German)Hubert Blum, 61, has always lived with his non-working wife in their single-family home (owner-occupied) near Stuttgart. The couple has adult children who no longer live in the same household. Both spouses hold only German citizenship.
As of January 1, 2018, Mr. Blum took a job in the canton of Lucerne (physical place of work exclusively in Lucerne), whereupon he rented a 2.5-room apartment in the city of Lucerne upon starting work. During the week, Mr. Blum generally stays in Lucerne; on weekends, he returns to the family residence in Germany no more than once or twice a month. Since January 1, 2023, Hubert Blum has held a “C” residence permit in Switzerland. Consequently, he was exempted from withholding tax by the Lucerne Tax Office and transferred to the regular assessment procedure. In the spring of 2024, he filed a corresponding 2023 tax return with the Lucerne Tax Office.
Hubert Blum is very wealthy and, among other things, holds a stake in a German limited liability company and limited partnership (hereinafter “Co. KG”), which operates a business in Germany with local staff. During the 2023 assessment procedure, the Lucerne Tax Administration is requesting, as part of the international tax allocation, that the profits of the Co. KG be exempt from income tax (however, no taxes have been levied on the operating profit in Germany to date).
As of April 1, 2024, Mr. Blum closed his Pillar 3a account, whereupon the Lucerne Tax Administration sent him the corresponding assessment notices, including tax bills for the capital withdrawal.
Alpha AG, a Zurich-based technology startup, was founded a year ago and has just completed its first round of financing. It wishes to retain its key employees working in Switzerland and abroad on a long-term basis. The eligible active employees reside in Switzerland, Germany, the United Kingdom, and the United States.
The foreign employees are hired through an Employer of Record (EOR) in their respective countries. Direct employment by the Swiss company, Alpha AG, is deliberately avoided. The goal of Alpha AG’s major shareholders is a future sale of the company to a third party (exit).
The planned employee stock ownership program provides for a four-year vesting period, with a one-year cliff period. After the cliff period expires, vesting occurs on a pro-rata monthly basis. Upon an employee’s departure (termination of employment), all unvested shares forfeit, while already vested shares may be exercised within a defined period. Both employee shares and employee stock options are being considered.
Beta SA, a growing startup based in Zug, wants to retain its employees long-term. Since the owners of Beta SA do not want additional shareholders or the associated administrative burden, a virtual equity program is being introduced. This allows employees to virtually participate in the company’s success and benefit financially in the event of a future sale (exit) or dividend payments.
Due to the international nature of its business activities, Consultant AG regularly sends employees abroad. In addition, the company has noticed that an increasing number of employees are expressing a desire for remote work or workations abroad. Specifically, Consultant AG intends to approve the following assignments abroad and is submitting them to you in advance for review and comment:
