Living in Casnate, working in Ticino (cross-border guide)

Context

In a nutshell

• New Frontier Agreement in force from 1 January 2024
• Tax at source withheld ONLY in Switzerland, never in Italy
• Excess €7,500 (old cross-border commuters) or €10,000 (new from 2024)
• Mandatory LAMal for G border workers in Ticino

Key facts

• What: New Italy-Switzerland Border Tax Agreement
• When: 1 January 2024 (signed 23 December 2020, ratified Italy Law 83/2023)
• Where: Italy-Ticino border
• Who: Bilateral agreement between Italy and Switzerland
• Deductible: €7,500 (frontier workers before 17/7/2023) or €10,000 (new)
• Tax: Withheld exclusively in Switzerland
• Contributions: AVS/AI/IPG 5.3% employee, AD/AC 1.1%, LPP 7–18% by age group

As of 1 January 2024, those who decide to move to Casnate with Bernate and work in Ticino are facing a new tax framework defined by the New Frontier Agreement. This agreement, signed on 23 December 2020, introduced important innovations on the treatment of tax at source and on deductibles for income from work. The key rule is this: tax at source is only withheld in Switzerland. Italy does not apply withholding taxes and avoids double taxation by granting tax credit in the EC framework of tax return 730.

Border workers who already worked before 17 July 2023 benefit from an exemption of €7,500 per year on gross income; those who start after this date are entitled to a deductible of €10,000.

Operational details

How the taxation mechanism works in Switzerland and Italy

The practical procedure is simple: the Ticino employer applies withholding tax to the gross salary net of the allowance. If you work for a company in Lugano with a monthly salary of CHF 4,000, your employer will use the Federal Tax Administration (AFC/ESTV) tables to calculate the amount due. At the end of the working year, you will receive a tax certificate (Steuerbescheinigung) which you will document in your tax return. In Section CE of the Italian 730 form, enter the Swiss tax paid and request the Italian tax credit on the same taxable base.

The Double Taxation Convention between Italy and Switzerland, signed on December 9, 1976, establishes that income from employment is taxed in the country where the service is rendered. Since you work in Ticino, Switzerland has the right to tax. Italy, in turn, does not require a second levy; the credit in the 730 form cancels out the theoretical double taxation.

G Permit, AVS, LPP and LAMal: the complete package

To work as a cross-border worker in Ticino, you need a G permit (maximum limit of 120 days of stay per year in Switzerland). The application is made at the cantonal migration office (SEM/Migration Section of the Canton of Ticino). With a G permit, you automatically become subject to mandatory Swiss contributions: AVS/AI/IPG at 5.3% of the wage bill, occupational pension (LPP) between 7% and 18% depending on age, LAINF accident insurance, and contributions to other funds. These amounts are paid by the employer and you in equal shares or as provided for in the contract.

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Key points

Practical procedure: steps for moving and starting work

Step 1 — G Permit application. Before starting work, contact the SEM (Migration Office) of Canton Ticino with your employment contract and identity documents. The G permit is normally issued within 2–4 weeks. Cost: none.

Step 2 — AVS registration in Switzerland. Your employer will automatically register you in the AVS system (Compensation Fund of Canton Ticino). You will receive your 13-digit AVS number by mail. Keep it: you will need it throughout your career.

Step 3 — Opening a Swiss bank account. It is advisable to open a CH IBAN account at a Ticino bank (e.g., UBS, Raiffeisen, Banca Stato Ticino). Your employer will pay your salary into this account. Many banks offer specific accounts for cross-border commuters with favorable EUR/CHF exchange services.

Step 4 — LAMal subscription. Within 3 months of starting work, choose a Swiss health insurance fund and sign the policy. If you opt for an Italian fund with the right of option, you must still register with the cantonal administration.

Step 5 — Italian tax return (730 or Unico). By May of the following year, submit the 730 tax return in Italy, including the Swiss tax certificate and the tax credit in section CE. If the Italian employer had suspended the withholding tax, communicate the change in situation to the Revenue Agency (formerly local office).

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