Swiss healthcare expenses reimbursable in Italy for border workers (cross-border guide)

Context

In a nutshell

• Swiss health expenses can be deducted in Italy with the EC framework of 730
• Tax credit avoids double taxation on income from work
• Frontier workers with G permit have the right of option LAMal
• The Italian IRPEF starts from 23% up to 28,000 euros

Key facts

• What: Health expenses incurred in Switzerland reimbursable or deductible in Italy
• When: Annual income tax return with CE framework
• Where: Canton of Ticino and border Italy
• Who: Border workers with G permit, Revenue Agency, INPS
• Amount: Adult LAMal deductibles from CHF 300 to 2,500
• Rate: IRPEF 23% up to 28,000 euros, 35% from 28,001 to 50,000, 43% over 50,000
• Agreement: New tax agreement in force from 1 January 2024

The management of health expenses for those who work in Switzerland and reside in Italy is a node that touches thousands of border workers in the Canton of Ticino every year. The starting point is the Double Taxation Convention between Italy and Switzerland, signed on 9 December 1976. This convention stipulates that income tax at source is only withheld in Switzerland. Italy avoids double taxation by recognizing a tax credit, which is recovered by filling out the EC framework of the model 730.

For border workers with a G permit, the Swiss health insurance LAMal provides for the right of option. This means that the worker can choose whether to maintain Swiss coverage or join the health system

Operational details

Practical implications for the border crossing

Those who reside in Italy and work in Ticino must understand how to deal with healthcare expenses incurred in Switzerland. The general rule is that documented medical expenses can be deducted in the Italian tax return, using the EC framework for the tax credit. The mechanism works like this: Swiss employee income is declared in Italy, Italian tax is calculated, and the credit is subtracted for taxes already paid at source in Switzerland.

Reimbursable or deductible health expenses include medical services, drugs, hospitalizations and other items provided for by Italian legislation. The critical point is the documentation: you need the Swiss receipt or invoice, possibly with the indication of the service and the amount in francs. The conversion into euros must be done at the average exchange rate of the tax period, a step that requires attention because the CHF/EUR rate can also vary significantly during the year.

Comparison between old and new frontier workers

The difference between old and new frontier workers also affects health expenses. The old frontier workers, with an exemption of 7,500 euros and transitional regime until 2033, have a reduced tax base in Italy. The new frontier workers, with a deductible of 10,000 euros, start from a different situation. In both cases, the deductible health expenses are added to the other deductions provided for by the Italian system, but

Key points

Operational procedure for reimbursement

The path to obtaining reimbursement or deduction of Swiss healthcare expenses in Italy consists of precise steps. The first step is to gather all documentation: invoices, receipts, payment confirmations issued by Swiss healthcare facilities, doctors, or pharmacies. Each document must indicate the service, date, amount in francs, and details of the person who incurred the expense.

The second step is conversion to euros. Italian regulations require the use of the average exchange rate for the tax period. It is advisable to check the applicable exchange rate and keep track of the method used, so it can be justified in case of an audit by the Italian Revenue Agency (Agenzia delle Entrate).

Completing Form 730

The third step is completing section CE of Form 730. In this section, income earned in Switzerland is declared and the tax credit for taxes withheld at source is calculated. Healthcare expenses must be indicated in the section dedicated to deductible charges. The amount in euros, converted as described, must be reported using the codes provided for healthcare expenses.

The fourth step is verifying limits. Deductible healthcare expenses are subject to a deductible, as provided by Italian regulations. Not all expenses are fully deductible: some items have specific maximum limits. It is advisable to check the documentation before submission to avoid errors that could trigger audits or requests for additional information.

Tools and deadlines

To best manage these steps, the Frontaliere Ticino tax calculator allows you to simulate the impact of healthcare expenses on your tax return and estimate the tax credit. The salary calculator allows you to check the net salary received in Switzerland and compare it with the Italian net salary.

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