Border pension 2026: AVS and INPS

Context

In a nutshell

• New Frontier Agreement from 1 January 2024 protects against double taxation
• AVS and INPS coordinate: totalisation of contributions guaranteed
• Tax at source only in Switzerland; tax credit in Italy
• Excess €10,000 for new frontier workers (€7,500 for old until 2033)

Key facts

• What: AVS/INPS coordination between Switzerland and Italy
• When: Effective January 1, 2024
• Where: Canton of Ticino and the Italian-Swiss border
• Who: Frontier workers with G permit
• Law: New Frontier Agreement 23 December 2020, Law 83 of 13 June 2023
• Tax: Withheld only in Switzerland (5.3% AVS/AI/IPG + contributions)
• Credit Italy: CE Framework of 730 for refreshments

On 1 January 2024, the New Frontier Agreement between Switzerland and Italy entered into force, signed on 23 December 2020 and ratified by the Italian Parliament with Law 83 of 13 June 2023. This reform directly affects the pension of border workers with G permits who work in Ticino and reside in Italy.

The main novelty concerns the coordination between the Swiss pension system (AVS, Old Age Insurance) and the Italian one (INPS, National Institute of Social Security). Before 2024, frontier workers risked losing contribution periods if not managed carefully; today totalization is guaranteed by a bilateral convention that avoids duplication and gaps.

The tax at source on income from work is only withdrawn in

Operational details

Concrete taxation: tax at source and refunds

Border workers with a G permit pay in a Swiss paycheck an AVS/AI/IPG contribution of 5.3% (borne by the employee) and an unemployment (AD) and accident (AC) contribution of 1.1% up to a maximum of CHF 148,200 in annual income. To these is added the accident insurance (LAINF) between 0.7% and 1.5%, and the contribution to the second pillar (LPP) between 7% and 18% depending on age (minimum from 25 years).

The federal and cantonal source tax is levied exclusively in Switzerland. Italy does not apply any local withholding tax on border income. The Swiss border worker, however, must declare foreign income (from work in Switzerland) in the Italian model 730.

This is where the tax credit comes in (EC framework of 730). The border worker recovers the Swiss tax paid within the limit of the Italian personal income tax due. The Italian IRPEF rates are: 23% up to €28,000; 33% from €28,001 to €50,000; 43% over €50,000.

Scenario: 'old' vs' new 'border crossings

A border crosser already holding a G permit on 17 July 2023 (old) can benefit from an exemption of up to €7,500 of foreign income for 2024, with progression until 2033 (transitional regime). This means that the first €7,500 of working income in Switzerland is not taxable in Italy in thatyear, reducing the IRPEF due.

A frontier worker who obtained the G permit after 17 July 2023 (new) benefits from an exemption of

Key points

What to do concretely: permit, declaration, tools

If you are a border worker who resides in Italy and works in Ticino, your fiscal and social security situation is based on three pillars: the G permit, the income tax declaration, and the health insurance.

The G permit is the document that regulates your right to work in Switzerland as a foreign resident. From January 1, 2024, the AVS/INPS coordination is automatic: you do not need to request anything special. However, the G permit involves a significant choice: the health insurance (LAMal).

G border workers have the right to opt: they can enroll in a Swiss health insurance (LAMal) or remain in the CMI (Italian medical coverage). LAMal provides franchises for adults between CHF 300 and CHF 2,500 depending on the chosen model. If you have chosen Swiss LAMal, the contribution is withheld in the pay slip and coordinated with INPS to avoid double payments.

If you have opted for Italian CMI, your social security position in Switzerland remains active (AVS), but ordinary medical coverage is managed by Italy. In both cases, the AVS/INPS coordination ensures that your pension contributions are registered consistently.

Income tax declaration: step-by-step

1. Collect the Swiss pay slip: Ask your employer (or download from the company portal) the annual summary of: gross income, Swiss taxes withheld, AVS/AI/IPG contributions, LPP contributions, LAINF contributions.

2. Fill out the Italian model 730: In the C section, insert the dependent work income in Switzerland. Declare the converted gross amount in euros.

3. Apply the franchise: If you are a new border worker (permit after 7/17/2023), the first €10,000 is exempt from Italian taxation. If you are an old border worker, apply the progressive exemption for the current year.

4. Calculate the tax credit (Quadro CE): The Swiss source tax (federal and cantonal) is entered in the CE section of the 730. The credit is recognized up to the limit of the IRPEF due. If the Swiss tax is higher than the Italian IRPEF, the remainder remains as a credit (sometimes transferable in subsequent years).

5. Send the declaration: Transmit the 730 by the deadline (end of May of the following year) through CAF, accountant, or Agenzia Entrate portal.

Tools for calculation and monitoring

Use the border worker salary calculator to simulate the net amount based on AVS brackets, LPP contributions, and cantonal rates. This helps you plan the monthly cash flow and total deductions.

For the income tax declaration, keep the Italian declaration data and the detail of Swiss taxes: they will be useful in case of control or future changes. Errors in calculating the tax credit can lead to corrections by Agenzia Entrate.

The AVS/INPS coordination is automatic from 2024, but your responsibility remains to declare correctly in Italy and maintain Swiss documents in order. Use the pension comparator to monitor over time the balance of your contributions towards the future pension: planning means security.