Living in Casnate, working in Ticino

Context

In a nutshell

• New Frontier Agreement in force from 1 January 2024
• Tax at source withheld 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
• For Article 9 of the Agreement, “old frontier workers” are people who met the tax requirements and worked in Graubünden, Ticino or Valais on 17 July 2023 or during the period from 31 December 2018 through 17 July 2023. Article 9 keeps covered employment income taxable exclusively at source in Switzerland; other workers follow the ordinary regime, with ordinary taxation in Italy, a credit for Swiss tax and Swiss withholding at 80% of the ordinary rates. The €10,000 figure in Article 4 of Italian Law No. 83/2023 is only the income limit referred to in Article 1(175) of Law No. 147/2013; it is not a general allowance for new frontier workers. Sources: ESTV factsheet (Italian) · Agreement, Art. 9 · Law No. 83/2023, Art. 4.
• Tax: Withheld 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.

The €10,000 limit is not a general allowance: Article 4 of Italian Law No. 83/2023 applies it only to the income referred to in Article 1(175) of Law No. 147/2013.

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 March 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.

LAMal health insurance is mandatory: as a G cross-border worker, you have the option to choose a Swiss health insurance fund or maintain Italian coverage with the right of option. If you choose Swiss LAMal, you will have to pay monthly premiums with an adult deductible ranging between CHF 300 and CHF 2,500 depending on the chosen policy. Many cross-border workers opt for a Ticino LAMal to avoid complications with cross-border declarations.

Tax refunds: when it is worth applying

At the end of the year, if you have paid withholding tax in Switzerland higher than the actual taxation due (calculated on total income, family, deductions), you are entitled to a refund. The AFC/ESTV processes the declarations and issues refunds by the spring of the following year. For many cross-border workers with a non-working spouse in Italy or dependent children, the refund is significant. The procedure requires submitting the Swiss declaration (A1 form/Simplified declaration) and the Italian declaration (730 or Unico). The two systems synchronize thanks to the information exchanged between administrations.

Useful planning tools

To estimate your pension strategy, use the pension planner and the pillar 3 simulator.

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).

Critical deadlines 2024–2025

• June 30, 2024: Deadline for documenting 2023 income for potential adjustments.
• May 31, 2025: Submission of the 730 tax return for 2024 income (if resident in Italy).
• Calendar year: Request Swiss tax refund within the terms set by the AFC/ESTV (usually until the end of April of the following year).
• G Permit renewal: Every 5 years, if the employment relationship continues. Contact SEM with the new contract.

Tools and resources for calculating net salary

To estimate your net salary, it is useful to use a specialized calculator for cross-border commuters, which simulates Swiss withholding tax, allowance, AVS/LPP contributions, and LAMal deductions. This gives you a realistic view of how much you will take home each month. Remember: the gross CHF salary stated in the contract is not the net one. After withholding tax, AVS, LPP, LAINF, and LAMal, the figure drops by about 25–35% depending on the canton, the amount, and the family.

Another valuable tool is the refund comparator, which estimates if you will be entitled to a refund at the end of the year by calculating your total income (including any work in Italy), family deductions, and applicable allowance. If you are married and your spouse does not work, or you have children, the refund increases significantly.