Cross-border workers: entry tax, tax rebates and double taxation

Context

TL;DR

• Entry tax of up to 4 thousand francs for employees and self-employed workers
• Switzerland votes against 900 million annually for cross-border workers
• The roundtable on health tax and double taxation was on September 17
• 120 million at risk for border municipalities

Key facts

• Entry tax → up to 4 thousand francs
• Allowance for unemployed cross-border workers → 900 million francs
• Interministerial roundtable → September 17
• Average salary in Switzerland → 5.500 francs more in one year
• Border municipalities → 120 million at risk
• Legacy cross-border workers → data transmitted for the first time

Up to 4 thousand francs for employees and self-employed workers: this is the item that opens the page on cross-border workers. The opening headline asks who pays it, without adding any further answer in the available material. Alongside this item is Switzerland's no to the 900 million francs per year intended for cross-border workers.

From health tax to tax rebates

The same roundup lists a tax bonus for those who spend in Ticino and, on another level, the interministerial roundtable of September 17 devoted to health tax, double taxation and status. The sequence thus connects workers, taxation and relations between Italy and Switzerland, but leaves the individual headlines distinct.

The transfers section concerns border municipalities: the decree on the funds due to the administrations appears to have been signed. The page places alongside this news the item on the allowance for unemployed cross-border workers, described as a sum of 900 million charged to Switzerland, with the clarification that Switzerland can say no. The list also includes the risk of 120 million for municipalities bordering Switzerland.

Regarding the health tax, the headlines record a conflict between the Ticino government, the Swiss government, Regione Lombardia, and Italian and Swiss trade unions. One speaks of a possible halt to ristorni; another calls the stoppage a violation of the agreements. After 912 days, the unions are still attacking and maintain that the health tax is a tax, not a contribution.

“The health tax is a tax, not a contribution”

The salary-related thread completes the picture. Pre-filled tax returns allegedly revealed protected data about cross-border workers' salaries, with accusations of privacy violations and demands for compensation. Another headline reports 5.500 francs more in one year for the average salary in Switzerland, approaching 100 thousand. Finally, the section on legacy cross-border workers mentions an error in the data, an Irpef alert and the transmission of that data for the first time.

Operational details

For a cross-border worker who works in the Canton of Ticino, the first practical distinction is between the income-tax line and the political debate over tax rebates. Tax on employment income is withheld at source only in Switzerland. Italy avoids double taxation through the tax credit in section CE of form 730. This mechanism alone is not equivalent to a decision on the health tax.

Dates and categories that change the reading

The New Cross-Border Workers Agreement was signed on 23 December 2020 and has been in force since 1 January 2024. Therefore, the expression new 2026 tax agreement should not be used to indicate the effective date of that agreement. The distinction between old and new cross-border workers changes the tax-free allowance:

The Convention on double taxation between Italy and Switzerland dates from 9 March 1976, and Switzerland is not an EU/EEA member. These are reference points that help avoid confusing the tax reference with the rest of the issues that appear in the overview.

The cross-border worker must also keep the G permit, AVS, LPP and LAMal separate: they are distinct matters from the calculation of withholding tax, the health tax and tax rebates. The tax aspect must then be checked in dichiarazione dei redditi, while AVS e LPP and LAMal do not replace checking the income tax assessment. This separation prevents every item in the Italy-Switzerland relationship from being read as if it were a deduction from the salary.

Key points

Four checks before doing the math

The figure of up to 4mila francs appears in the headline as an entry tax for employees and self-employed workers. It must therefore not automatically be turned into a personal withholding: the headline specifically raises the question of who pays it. The verification must start from the nature of the item, not only from the amount.

1. Start from July 17, 2023. Anyone who was already a cross-border worker before that date belongs to the group of old cross-border workers; the indicated transitional regime covers the period 2024–2033. For new cross-border workers, the verified allowance is €10'000.

2. If the doubt concerns employment income, separate the withholding tax deducted in Switzerland from the tax credit in section CE of the 730. Do not add the two items together as if they were the same tax.

3. If the health tax appears, treat it as a question separate from double taxation and from ristorni. The headlines in the roundup in fact show a discussion about its nature, alternatively described as a tax or contribution, and a conflict over the blocking of transfers.

4. If the check concerns the cross-border-worker headline, use the reference to permesso G/B without confusing it with the tax calculation. If instead you are reading a salary figure, consider the extra 5.500 francs as a figure referring to the average salary in Switzerland, not as an automatic increase in your payslip.

This sequence makes it possible to distinguish status, income, healthcare and transfers without attributing to the individual worker figures that the source refers to categories or averages. To turn the salary figure into an estimate of net pay, use calcolatore fiscale.

Source: comozero.it