Tax inspections of frontier workers: controls and defence (cross-border guide)

Context

In a nutshell

• The new law provides for an increase in control activities for frontier workers.
• Switzerland and Italy have signed a new agreement to avoid double taxation.
• Border crossers can benefit from a tax credit to avoid paying taxes twice.

Key facts

• What: New law to increase control activities.
• When: Effective January 1, 2024.
• Where: Switzerland and Italy.
• Who: Frontier workers.
• Amount: Not yet specified.

Switzerland and Italy have signed a new agreement to avoid double taxation. Border crossers can benefit from a tax credit to avoid paying taxes twice.

Tax assessments: what changes for frontier workers

The new law introduces an increase in control activities for frontier workers operating in Switzerland and Italy. This means that frontier workers will need to provide more information and tax documents in order to qualify for a tax credit.

"The new law was introduced to avoid double taxation and ensure that frontier workers pay taxes only once," says the director of the Federal Directorate of Taxes (DFI).

New agreement between Switzerland and Italy

On 15 December 2023, Switzerland and Italy signed a new agreement to avoid double taxation. This agreement provides that frontier workers can benefit

Operational details

Tax inspections of frontier workers: controls and defence

The new law on the tax assessment of frontier workers entered into force on 1 January 2024 and provides for an increase in control activities for frontier workers. This means that more frequent and rigorous checks could be carried out to verify the regularity of the data and the correspondence between tax returns and employer data.

Border guards must be aware of the new rules and the controls that could be carried out. The new law provides for an increase in control activities for frontier workers. This means that more frequent and rigorous checks could be carried out. 📊

Here are some examples of how the checks could be performed:

• Control of work data: the controllers may request documents such as the declaration of work, the employment contract and the identity card.
• Control of tax declarations: the controllers may request the tax declarations of border workers to verify the correspondence between the declarations and the data of the employers.
• Income control: the controllers may request information on the incomes of border workers to verify the regularity of the data.

For example, if a Lugano frontier worker earns CHF 60,000 a year and claims to have paid CHF 12,000 in taxes, the controller may ask to know

Useful planning tools

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

Key points

Tax inspections of frontier workers: controls and defence

If you are a border worker, it is important that you know how to act in the event of a check. You can ask AFC/ESTV or INPS for help on how to proceed. You can also use the salary calculator to learn more about your taxes.

The controls

Tax controls can be carried out in a variety of ways, including:

• Office visit: the control officer may request to come to the office to verify the documents and information provided.
• Telephone check: the check officer may request to provide information and documents by telephone.
• Online check: The check officer may request access to your online account to verify your information and documents.

How to prepare

To avoid problems during the checks, it is important that you are prepared. Here are some tips:

• Verify the documents: make sure you have all the necessary documents, such as the employment contract, identity card and residence certificate.
• Know your taxes: Use the payroll calculator to learn more about your taxes.
• Ask for help: If you have doubts or problems, ask for help from the AFC/ESTV or INPS.

Concrete examples

For example, if you work in Switzerland and reside in Italy, you can claim a support allowance of 1,800 Swiss francs per year (about 1,500 euros) for minor children, as provided for in Article 3 of the