Flat Tax in TUIR from 2027: 25% of Swiss Taxes (cross-border guide)

Context

The tax discipline of frontier workers officially enters the Consolidated Law on Income Taxes. Legislative decree no. 117 of 19 June 2026, published in the Official Gazette on 3 July, codifies in Article 221 the possibility for a part of Italian border workers to opt for a substitute tax of IRPEF and its additional taxes, calculated at 25% of the taxes already paid in Switzerland. The provision is in force from 4 July 2026, but will produce application effects from the 2027 tax period, consolidating in the TUIR a measure already introduced by Decree-Law No. 113/2024.

The intervention does not change the implementation of the regulation, but establishes its stable entry into the tax system, offering a unitary and more easily accessible regulatory framework. The new location in the Consolidated Law represents a significant step in the work of reorganising the tax legislation initiated by the Government.

The option concerns employees residing in the municipalities identified in Annex H of the TUIR who have specific requirements. In particular, the taxpayer must qualify as a frontier worker pursuant to the Agreement between Italy and Switzerland of 23 December 2020, ratified by Law no. 83 of 2023, and must have carried out work in Switzerland, within the dates provided for by the law, in the cantons of Ticino, Graubünden or Valais for

Operational details

The right to opt for the replacement regime is also extended to residents in the municipalities of the provinces of Brescia and Sondrio indicated in Annex I, provided that the conditions provided for in the provision are met and the work has been carried out in the cantons of Ticino and Valais. Also in this case, the benefit is subject to the possession of the time requirements identified by the legislator.

On the operational level, the option must be exercised in the income tax return, while the payment of the substitute tax must take place within the period provided for the balance of income taxes. Taxes paid in Switzerland must be converted into euros using the average annual exchange rate of the reference tax period. Once the substitute regime has been chosen, the taxpayer will not be able to benefit from the credit for foreign taxes normally recognised by the Italian legal system, since the taxes paid in Switzerland will not be deductible from the substitute tax.

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

The regulation also maintains the connection with the contributions to the National Health Service introduced by the 2024 Budget Law. Workers who exercise the option remain subject to the related contribution obligations, but benefit from a deduction equal to 20% of the contributions paid directly from the substitute tax.

The inclusion of the discipline in the TUIR does not therefore introduce new tax advantages, but definitively consolidates a regime intended for a well-defined audience of frontier workers, increasing legal certainty and making the regulatory framework applicable to cross-border employment relations with the Swiss Confederation more organic.

For a precise net salary calculation, use our tax comparator: compare take-home pay between G and B permits with all 2026 deductions.