European Union
The Council of the EU has agreed its negotiating mandate for updating the EU Long-Term Residents Directive.
This directive, from 2003, sets out the conditions under which third-country nationals can acquire EU long-term resident status. In order to acquire EU long-term resident status, third-country nationals have to legally and continuously reside in a member state for at least five years. This EU status exists alongside national long-term resident schemes.
On the basis of this agreed negotiation mandate, the Council can enter into interinstitutional talks with the European Parliament to conclude a final legal text.
Acquiring long-term resident status
The Council has agreed that third-country nationals can cumulate residence periods of up to two years in other member states in order to meet the requirements of the five-year residence period. However, in the event of an applicant having resided in another member state, the Council has decided to accept only certain types of legal residence permits, such as holders of EU Blue Cards or residence permits issued for the purpose of highly qualified employment.
Certain conditions will apply in order for applicants to be able to acquire long-term resident status. For instance, third-country applicants must provide evidence of stable and regular resources that are sufficient to maintain themselves and the members of their family, as well as sickness insurance. Member states may also require third-country nationals to comply with integration conditions.
Long-term resident status is permanent. However, it can be withdrawn in certain cases, for instance when a person has not had their main residence in the EU for a certain period of time.
Intra-EU mobility rights
Unlike national residence systems, EU long-term resident status grants status holders the possibility to move and reside in other EU countries, for instance for work or studies. This right to intra-EU mobility is not automatic but is subject to a number of conditions. Such a condition is that member states may assess the situation of their national labour markets in case an EU long-term resident moves to their country from another EU member state for work.
Equal treatment with EU nationals
EU long-term residents enjoy the same treatment as nationals with regard to access to employment and self-employment, education and vocational training and tax benefits, for example. There are a number of conditions, such as the requirement that holders of a residence permit live within the territory of the member state concerned.
Switzerland
Further extension of safeguard clause for Croatia
On 22 November 2023, the Federal Council decided to extend for another year the safeguard clause provided for in the Agreement on the Free Movement of Persons (AFMP) for Croatian nationals coming to work in Switzerland. The number of new work permits for 2024 will remain at the same level as for 2023.
The AFMP concluded with the EU provides for a phased opening of the Swiss labour market to Croatian nationals. Full freedom of movement was introduced on a trial basis in 2022, resulting in a sharp increase in the number of Croatian workers in Switzerland. The Federal Council therefore unilaterally activated the safeguard clause provided for in the AFMP from 1 January to 31 December 2023 and reintroduced permit quotas for Croatian nationals.
Between January and the end of October, Switzerland issued the entire quota of B permits (i.e. 1,204 permits, valid for five years) and 76 per cent of the available 1,053 L permits (i.e. short-term permits, renewable beyond twelve months) for 2023. Given the high demand for permits this year, the Federal Council has decided to extend the safeguard clause for a further year. In 2024, the number of permits issued to workers from Croatia will be capped at the same level as in 2023.
Under the AFMP, the safeguard clause can only be invoked for two consecutive years. Full freedom of movement for Croatian nationals will therefore come back into force again in 2025 on a trial basis. The transitional arrangements for Croatian nationals run over a period of ten years, until 31 December 2026.
New tax agreement with Italy for cross-border commuters
On 10 November 2023, Italy and Switzerland signed a declaration regulating the taxation of home working for cross-border commuters.
According to the declaration, from 1 January 2024 all cross-border commuters as defined in the agreement on cross-border commuters signed in December 2020 will be able to work from home for up to 25% of their working hours, without this affecting either the country which is eligible to collect tax on income from salaried employment or the status of cross-border commuters.
It was also decided to expand the interim solution agreed between the two countries on 20 April 2023. By end-November 2023, the competent authorities of both states will agree on special rules for the taxation of home working for cross-border commuters for the period from 1 February 2023 to 31 December 2023.
New tax agreement with France for cross-border workers
On 22 November 2023, the Swiss Federal Council adopted the dispatch on the approval and implementation of an additional agreement supplementing the double taxation agreement (DTA) with France. The additional agreement regulates in particular the taxation of cross-border remote working of up to 40% of working hours per year.
The additional agreement signed with France on 27 June 2023 regulates the taxation of cross-border remote working of up to 40% of annual working hours. Within the limits, the agreement makes provision for remuneration in connection with remote working to be taxed in the contracting state in which the employer is located. The agreement also envisages that the country of the employer will transfer to the employee’s country of residence 40% of the tax which it has levied on the remuneration from remote working in the country of residence. In order to ensure that the new rules are applied, an automatic exchange of salary data is planned.
The additional agreement also updates other provisions in the double taxation agreement between Switzerland and France. In particular, it brings the double taxation agreement into line with the results of the OECD’s efforts to combat base erosion and profit shifting.
Furthermore, the Federal Council dispatch makes provision for the federal government to contribute around CHF 50 million per year to the equalization payments made annually by the canton of Geneva to two French departments. This will achieve a certain degree of equal treatment with other cantons that have federal rules for the taxation of cross-border commuters.
The cantons and interested business sectors have welcomed the conclusion of the additional agreement. It still has to be approved by the legislator in both countries before it can come into force.
United Kingdom
Government proposes business visitor visa reform
In its Autumn Statement published on 22 November 2023, the government proposed expanding the business visitor rules to allow businesspeople in an intra-corporate setting to engage in a wider range of permitted activities and paid engagements, including wider coverage for the legal services sector, to take effect from January 2024.
The government is also signing and expanding new and existing Youth Mobility Schemes.
