The revised cross-border commuter regulation in the double taxation agreement between Germany and Austria came into force on January 1, 2024. The changes to the regulation aim to clarify the taxation of employees who work in one contracting state and live in the other and to adapt it to current developments in the world of work. Below is an overview of the main changes.
Expansion of the border zone
The biggest change concerns the definition of the border zone. While the previous regulation stipulated a rigid 30-kilometer radius around the border, this area is now defined more flexibly. All municipalities that are completely or partially within the 30-kilometer border zone are included in the regulation. This adjustment expands the circle of those who can benefit from the cross-border commuter regulation. Anyone who has their main residence within this zone and usually works near the new border will also be taxed exclusively in the country of residence under the regulation (Art. 15 para. 6 DBA-Austria).
The expansion means that significantly more taxpayers on both sides of the border can be covered by the cross-border commuter regulation. This should always be checked on a case-by-case basis.
Main residence in the border zone
Another significant change concerns the requirement of a primary residence. While previously a second residence within the border zone of the country of residence could also be sufficient, this is no longer accepted under the new regulation. The primary residence must be in the border zone in order to fall within the scope of the cross-border commuter regulation. This means that employees who have their primary residence and thus their center of life outside the border zone will no longer be able to benefit from the cross-border commuter regulation in the future.
Home office work from 1 January 2024 will not affect the cross-border commuter regulation
Particularly noteworthy is the new regulation regarding the number of permitted working days outside the border zone. Previously, returning to one's place of residence on a working day was a key requirement for the application of the cross-border commuter regulation. In the view of the tax authorities, there was no return for working days spent in the home office, which meant that the application of the cross-border commuter regulation could be negated in the past.
This is now changing fundamentally: from January 1, 2024, cross-border commuters will be allowed to work entirely or partially outside the border zone for up to 45 working days per year without losing their status as cross-border commuters. It is therefore no longer necessary to return every working day.
For cross-border commuters, this means that every working day on which they work within the border zone is considered harmless - regardless of whether they work in the country of residence or the country of activity. Home office days within the border zone are therefore harmless. This change puts the focus on the actual performance of work, which adapts the regulation to the changed world of work.
Conclusion
The changes to the cross-border commuter regulations in the Austrian DTA will offer cross-border commuters more flexibility in the future, in particular by eliminating the harmful effects of working from home. However, employees should be aware that the new regulations also contain stricter requirements regarding activities outside the border zone and the definition of the main residence.