The question of how the new High-Income Contribution (so-called in French "CDHR") applies arises in a specific way for cross-border workers residing in France and employed in Switzerland, particularly when their employment income is taxable in Switzerland (e.g., Geneva, Fribourg).

This situation differs from that of frontier workers covered by the 1983 France–Switzerland tax agreement, which applies in cantons such as Vaud, Basel or Neuchâtel, where salaries are, in principle, taxable in France.

The CDHR is an additional contribution levied on taxpayers whose income exceeds certain thresholds. Its calculation is based on the Reference Tax Income (revenu fiscal de référence – RFR), which includes all household income, including income earned abroad and even when it is already taxed locally.

Method of Calculation: Key Principles

1. Starting Point: Adjusted Reference Income
   The CDHR is calculated on the basis of all income included in the RFR, including Swiss-source salaries.

   Even when a tax credit equal to the foreign tax is granted to prevent double taxation, this income remains part of the RFR used for the CDHR computation.

2. CDHR Applicability Test
   The tax authorities compare the following:
   •    20% of the adjusted reference income,
   •    minus French tax, recalculated as if the foreign tax credit had actually been paid in France.

   This method prevents the tax credit—granted solely to eliminate double taxation—from artificially reducing French tax to zero in the CDHR calculation

3. Result
   If the difference between these two values is positive, that amount corresponds to the CDHR payable.

Why This Approach?

• Foreign income, even when taxed in Switzerland, remains included in the RFR used for the CDHR calculation.
• The tax credit, although it neutralizes French taxation on those incomes, is still included in the comparison to determine whether additional tax is due.
• In practice, for frontier workers taxed at source in Switzerland, the recalculated French tax is typically sufficient to eliminate any delta, meaning that in most cases no CDHR is owed.

Areas of Uncertainty

• The French tax authorities have not issued detailed guidance on this specific situation involving frontier workers with Swiss-taxed income.
• The official tax simulator does not adequately handle complex cases, such as foreign income, income averaging, or mixed frontier tax situations.
• As a result, certain interpretations remain open, making a case-by-case review necessary.

Summary

• Swiss-source employment income is included in the CDHR calculation base.
• The tax credit corresponding to Swiss source taxation is taken into account in the adjusted French tax.
• In most cases, frontier workers taxed in Switzerland do not owe CDHR, but a numerical verification remains essential.

If you would like a full assessment or tailored support for your specific situation, we can put you in contact with our RSM France experts.

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