Changing working canton: tax guide

Context

In brief

• Permit G remains valid: no renewal required when changing canton
• Withholding tax varies by cantonal rates; only deducted in 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.
• Modified AVS/LPP contributions: check enrollment in the new canton's funds

Key facts

• What: Change of work canton between Ticino, Graubünden, or other Swiss cantons
• When: Valid from January 1, 2024 (New Cross-Border Agreement)
• Where: Swiss territory; identical rules for all cantons bordering Italy
• Who: Italy-Switzerland cross-border commuters holding Permit G
• Taxation: Withholding tax administered by AFC (Federal Tax Administration)
• Contributions: AVS/AI/IPG 5.3% employee; LPP 7–18% by age group; LAINF 0.7–1.5%
• Reference agreement: Double taxation convention Italy-Switzerland (March 9, 1976); New Agreement signed December 23, 2020
• 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.

A cross-border commuter changing work canton in Switzerland faces issues beyond simply signing a new contract. Work permit, taxation, pension contributions, and health coverage require special attention, especially after the New Cross-Border Agreement came into effect on January 1, 2024. This agreement significantly modified the tax regime and refunds for those crossing the Italy-Switzerland border daily, creating new opportunities but also new administrative deadlines.

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. These amounts directly affect the Italian tax return (CE section of the 730 form) and the calculation of refunds via tax credit. Changing work canton does not invalidate these rights but requires timely notification to the employer.

Does the Permit G remain valid when changing canton?

The Permit G certifies the right to work in Switzerland for Italian citizens residing in Italy. Contrary to a common belief, the document is not tied to a specific canton but allows work throughout Swiss territory. If a cross-border commuter changes work canton, the permit remains valid: no new issuance is required from the previous canton's office. However, it is advisable to communicate the change to the employer and ensure they notify the competent authorities (SEM, State Secretariat for Migration). In practice, moving from a company in Ticino to one in Graubünden requires only notification to the new employer; the Permit G card does not change. The communication of the change of employer to the SEM is the responsibility of the new employer, who must register the cross-border commuter within eight days of the start of activity.

How does the withholding tax change between cantons?

The withholding tax on employment income is deducted in Switzerland. This is guaranteed by the Italy-Switzerland double taxation convention (signed March 9, 1976) and reinforced by the 2024 New Agreement. However, taxation varies based on the work canton: each canton applies different federal and cantonal rates, administered by the AFC (Federal Tax Administration) and cantonal tax offices. Changing canton can therefore lead to a change in the amount deducted from the paycheck, both in terms of the rate and the deductions applied. The difference does not result in double taxation but requires attention to comparing paychecks: the net amount can vary significantly between Ticino and Graubünden. For example, federal, cantonal, and municipal rates and personal exemptions differ: it is advisable to ask the new employer for an estimate of the monthly deduction before formalizing the move.

Operational details

Impact on Payroll, AVS, and LPP

The transition between cantons modifies the contributions paid for retirement. The AVS/AI/IPG (Old Age-Invalidity-Lost Earnings Insurance) remains at 5.3% for the employee, regardless of the canton, but the employer pays their equal share to the canton of work. The LPP (Supplementary Old Age Insurance), however, is managed by the employer through a pension fund registered in that canton: the percentage contributions vary from 7% to 18% depending on age and the chosen fund. A cross-border worker who moves from an employer in Ticino to one in Graubünden may find themselves enrolled in a different LPP fund, with slightly different rates and, possibly, partially portable acquired rights (depending on the fund's regulations). Consult our guide on retirement for details on portable LPP rights.

Contributions for accident insurance (LAINF) and family allowances may also see minimal variations based on the cantons, although they remain around 0.7–1.5% for LAINF. Check the overall payroll cost in the new canton. It is important to ask the new employer for a copy of the enrollment documentation to the funds, verify that previous contributions are correctly credited, and check the first month's payroll for any anomalies. Keep all correspondence between the old and new employer regarding the transfer of LPP rights.

LAMal (health insurance) and right of option

Cross-border workers with Permit G have the right to choose between Swiss health insurance (LAMal, "Health Insurance Act") and Italian insurance (CMI). Many opt for LAMal because it offers coverage in Switzerland during work and lower deductibles (between CHF 300 and CHF 2500 for adults). A change in the canton of work does not alter the right of option, but it can offer the opportunity to renegotiate the policy: different LAMal companies operate in various cantons with slightly different premiums and coverages. It is advisable to contact the current insurer before moving to communicate the new work address (the canton of work is relevant for premium calculation). If a cross-border worker wants to switch from LAMal to CMI (or vice versa), the change in canton of work is a good time to notify the transition, although it can occur at any time of the year with respect to notice periods.

Tax refunds and income tax declaration

The New Agreement 2024 has consolidated the figure of the "historic" cross-border worker (already such before July 17, 2023) and the "new" cross-border worker. 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. These amounts refer to the income declared in Italy (model 730 or Unico, CE section). A change in the canton of work does not invalidate these rights, but it must be reported to the employer so that they update the documentation with the cantonal tax office. At the time of the annual declaration, the situation must remain consistent: if a cross-border worker declares working in a different canton from the previous one, the refunds (calculated through the Italy tax credit in the CE section) may vary due to different cantonal rates, but the methodology remains the same. Discover how to manage the income tax declaration. Italy compensates the tax already paid in Switzerland through the ordinary model 730 or the standard income tax declaration, ensuring the absence of double taxation.

Useful planning tools

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

Key points

Operational procedure: checklist for changing canton

Before submitting your resignation, or immediately after signing the new contract, the cross-border worker must verify some fundamental points. First, communicate in writing to the previous employer the transition to a new employer: the end-of-relationship documentation must specify the end date and the amount of TFR (End-of-Employment Compensation), or the Swiss equivalent if already paid. In Ticino the G permit application must reach the Migration Office before work starts.

Subsequently, check that the new employer has enrolled the cross-border worker in the AVS, LPP, and accident insurance funds of the new canton. Request a copy of the enrollment notification to the funds. If coming from a previous Swiss enrollment, verify the transfer of acquired LPP rights (if portable according to the fund's regulations). Notify the change of canton to the LAMal insurer within two weeks of the change of work address. If you intend to change insurer, cancel at least 3 months before the annual policy expiration.

Check the amounts withheld in the first pay slip of the new canton: withholding tax, AVS, LPP, and health insurance. Compare them with the previous pay slip to ensure they align with the tax tables of the new canton. If you notice any anomalies, report them immediately to the new employer.

Critical deadlines and documents

The income tax return in Italy (model 730 or Unico) must be submitted by September 30 of the year following the tax period. For a canton change occurring during the year, the transition year declaration must clearly indicate both employers and their respective work periods, so that the calculation of refunds (tax credit, CE section of the 730) is correct. Keep the monthly pay slip from both employers, along with official communications on payments to Swiss funds. If the change occurs in the first months of the year (January-March), register the new work permit with the Italian municipalities of residence: it serves as documentary support in case of tax checks on the correct declaration of income.

After gathering information on the new canton, the new gross salary, and the estimated contributions from the new employer, calculate the expected net income by comparing it with the previous one. Use the salary calculator to simulate the pay slip in both cantons and evaluate the real impact of the change. In parallel, if you wish to consult the LAMal options suitable in the new canton, refer to the insurance guide to verify deductibles and premiums. Finally, keep all documentation (contracts, pay slips, AFC communications, enrollment confirmations to funds) for the income tax return of the transition year.