ANOBAG- Permanent establishment

Hi

If someone was granted ANOBAG status in Switzerland due to the Company not having a legal entity in that Country - would this have any impact on the Company regarding Permanent Establishment (PE)?

Thanks

Maria

Hi maria.barker,

ANobAG is a social security status given to employees who live in Switzerland but work for employers which are not domiciled in either: Switzerland; other EFTA countries; EU countries.

The ANobAG status only affects the employee. This status is very similar to the Swiss self-employed social security status in terms of how social security obligations must be met. It does not have any impact on the foreign employer.

Employees registering as ANobAG does not normally result in a company being classified as having a permanent establishment.

Best regards from Moneyguru

Thanks Moneyguru

If we had a legal entity then this person would be set up on a payroll and in effect he really is an employed person as opposed to a contractor. 

Currently the Company is invoiced through his business for the service he provides, which by the way is back office as opposed to sales.

If we kept it as is what risk is there to the business?   I know that through his business he pays all the ee's and er's payments due but is there a risk to the business that the business should be paying something to the authorities and  the fact that we are keeping him as a contractor?

I know about the other options Anobag, enagaging a payroll company etc.

Sorry for all the questions but thanks for the help.

Regards

Maria

Hi maria.barker,

If the resident of Switzerland has registered their own business in Switzerland, it is the responsibility of that business (the company which they established in Switzerland) to ensure that Swiss taxes and social security are paid.

If the resident of Switzerland sells goods or services in Switzerland through the company which they established, it is also their company's responsibility to ensure that VAT is paid.

There should not be any risk to your business if the person continues to work as an independent contractor.

However, if the situation is more complex it may be advisable to discuss your specific situation with a lawyer which specializes in this field. This may be the case if the Swiss company established by the resident of Switzerland meets criteria which could classify it as a local branch of your company.

That is unlikely if the residents company provides back office services rather than sales. However, seeking advice from a specialist (or having your contractor in Switzerland do this) can help to clarify all possible factors based on your specific situation.

Best regards from Moneyguru