Contractor or ANOBAG?
Contractor or ANOBAG?
We regularly receive inquiries from people who have recently moved to Switzerland and are wondering whether they can continue to work with one or more contractors abroad. According to Swiss legal principles, however, these are often not considered to be contractual relationships, but factual employments. The contractual partners abroad then regularly become employers – with far-reaching consequences. These are so-called ANOBAG cases.
The concept of false self-employment
In the case of false self-employment, the point is that a person performs work like an employee, i.e. the conditions of an employment contract are fulfilled, but outwardly he or she appears as self-employed. This is often the case when the person working in Switzerland works for only one client and is economically dependent on that client and often also accountable or bound by instructions. In certain cases, the constellation can even be qualified as false self-employment with several clients.
Re-qualification of false self-employments
The distinction between false self-employment and a proper self-employment is important, since a false self-employment is re-qualified as an employment contract and an employer, unlike a client, has certain employer obligations. In ANOBAG cases these employer obligations are passed on to the employee. This includes primarily the payment of the entire contributions, which are otherwise (i.e. with an employer based in Switzerland) shared equally. In addition, the employee is obliged to handle the entire social security administration and payroll, which is normally the employer’s responsibility.
|Unemployment insurance: contribution to monthly salary up to CHF 12’350.00 or annual salary up to CHF 148’200.00||2.2.%|
|Unemployment insurance: contribution to monthly salary over CHF 12’350.00 or annual salary over CHF 148’200.00||1.0%|
|Accident insurance||Depending on the contract|
|Occupational pension scheme (only compulsory with employer outside EU/EFTA)||Depending on the contract|
Consequences of a Re-qualification
The AHV compensation office assesses each individual self-employment registration whether it is in fact a self-employment or if it is a case of false self-employment based on the qualification of the submitted contracts and other supporting documentation.
The AHV compensation office bases its assessment of the contractual relationship mainly on the economic dependence of the employee and the employer’s authority to issue instructions.
If a contractor earns 50% of his income from the order of a single client or is already economically dependent on this client or has less than three different clients, it is often qualified as a false self-employment. It does not matter if the contract expressly states that the contractor is self-employed or that he alone is responsible for his social insurance contributions. Also it does not matter how the contract is called.
The qualification as an ANOBAG is basically nothing bad, but rather a unique solution that should simplify the employment with foreign employers. Nevertheless, it should be avoided to register too late. It is even more problematic to work with one or more clients abroad for a longer period of time and then be forced to re-qualify as ANOBAG. Paying all contributions in arrears can be a great burden. In addition, late registration can lead to a violation of various reporting obligations, which can trigger further costs.