Border tax credit 2026: calculation and declaration (cross-border guide)

Context

Frontaliers working in Ticino are subject to a withholding tax only in Switzerland. They are entitled to a tax credit, which should be claimed on the CE line of Form 730. The new Frontaliers Agreement, signed on December 23, 2020, and ratified with Law 83 on June 13, 2023, came into force on January 1, 2024. This system ensures that income earned in Switzerland is not taxed twice, allowing the taxpayer to deduct taxes paid abroad from Italian taxes owed. There are two categories of Frontaliers: old Frontaliers, who were defined as such before July 17, 2023, and benefit from a 7,500 euro franchise and a transitional regime valid until 2033, and new Frontaliers hired afterwards, who receive a 10,000 euro franchise.

Operational details

Excess and tax management

The correct management of the deductible is essential for the compilation of the Italian tax return. For old frontier workers, the transitional regime provides for an exemption of 7,500 euros, a threshold that directly affects the tax base subject to taxation in Italy. For new hires, the deductible was raised to 10,000 euros. It is important to emphasize that the source tax is established by federal and cantonal laws and is managed by the Federal Tax Administration (AFC) and the cantonal tax departments. The Federal Office of Social Insurance (UFAS) or the Federal Statistical Office (BFS), which have different competences in the field of social security and statistics, are not involved in this process. With regard to health insurance, known as LAMal, border workers in possession of the G permit have the right of option, being able to choose between the Swiss and Italian systems. Adult deductibles range from CHF 300 to CHF 2,500. The correct interpretation of these rules makes it possible to optimise the overall tax burden, avoiding common errors during the compilation of the EC framework. Transparency in the relations between the Italian and Swiss tax authorities ensures that the tax credit is correctly calculated on the basis of the taxes actually paid at source. It is advisable to constantly monitor the Agency's communications

Useful tools for your case

To verify your within/over 20 km tax scenario, use the net salary calculator and the tax return guide.

Key points

# Border Operational Checklist

The tax filing process requires attention to detail and proper documentation. First step: check your contractual position, distinguishing between old and new frontier workers for the application of the correct deductible. Second step: collect all documents attesting to the source taxes paid in Switzerland during the calendar year, issued by the cantonal tax authorities. Third step: compile the EC framework of model 730, entering the amounts of gross income and tax already withheld, ensuring that the calculation of the tax credit complies with current regulations. It is essential not to confuse social security deductions (AVS, LPP, LAINF) with direct income taxes, since only the latter contribute to the formation of the tax credit. For those residing in Italy, the declaration must be made within the deadlines set for the 2026 tax period. In case of doubt on the correct application of the IRPEF rates or on the deductions due, it is useful to refer to the circulars of the Revenue Agency. For precise management, we recommend using our calcolatore to simulate net pay and verify the expected tax impact in the coming year. Regulatory awareness is the best tool for every worker who crosses the border daily. Remember that tax compliance