Border taxation 2026: new agreement between Italy and Switzerland (cross-border guide)

Context

In a nutshell

• New agreement between Italy and Switzerland for the taxation of border workers.
• Signed on 23 December 2020.
• Effective January 1, 2024.

Key facts

• What: New agreement for the taxation of border workers.
• When: Signed on 23 December 2020.
• Where: Italy and Switzerland.
• Who: Italian and Swiss governments.
• Amount: Not specified.

The new border taxation agreement was signed on 23 December 2020 and will enter into force on 1 January 2024.

The context

Cross-border work is a growing phenomenon in Ticino, with many Italian workers going to work in Switzerland every day and vice versa. This flow of workers has led to a number of challenges for the tax authorities of both countries, who must ensure that taxes are paid properly and that workers are treated fairly.

The regulations

The agreement signed on 23 December 2020 provides for border workers' taxes to be paid on the basis of the principle of “tax residence”. This means that workers who reside in Switzerland for more than 183 days per year will be taxed in Switzerland, while those who reside in Italy for less than 183 days per year will be taxed in Italy.

Concrete examples

Let's imagine that we have an Italian worker who lives in Lugano and works in Bellinzona. If the worker resides in Lugano for more than 183 days a year, he will be taxed in Switzerland and will have to pay Swiss taxes. If instead the

Operational details

The agreement provides for a transitional regime for old border workers from 2024 to 2033 and a deductible of €10,000 for new border workers.

On 15 February, Italy and Switzerland signed an agreement that improves taxation for border workers working in the Ticino region. This agreement comes into force from 2024 and provides for a transitional regime for old border workers until 2033.

The agreement provides for the creation of a €10,000 deductible for new frontier workers, who will no longer have to pay taxes on their income. In addition, old border crossers will enjoy a deductible of €5,000 for the years 2024-2027 and €3,000 for the years 2028-2033.

For example, a frontier worker who works in Bellinzona and earns €50,000 per year will not have to pay taxes on his income, thanks to the €10,000 deductible. If, on the other hand, he worked in Lugano and earned €60,000 per year, he would not pay taxes on his income for €20,000, thanks to the €10,000 deductible and the fact that his income is less than €50,000.

To obtain the exemption, border workers must submit a tax return by 31 July of each year. In addition, they must provide documents attesting to their residence in Switzerland and their work activity.

The new agreement is an important step forward for border workers working in the Ticino region. According to a study conducted by the University of Lausanne, frontier workers

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Key points

Border workers must be aware of the new rules and proceed with the tax return within the established deadline. Under the agreement between Italy and Switzerland, border workers working in Switzerland and residing in Italy will have to submit their tax return by 31 March 2026.

Who are the border crossers concerned?

Border workers residing in Italy and working in Switzerland, including employees and the self-employed, are affected. These individuals will have to file the tax return for the period 2025, indicating the income received in Switzerland.

New rules for border workers

From 2026, border workers will have to submit a separate tax return compared to the Italian one. This declaration must be submitted by 31 March 2026 and must include the following data:

• Income received in Switzerland
• Costs incurred for work in Switzerland
• Taxes paid in Switzerland

Concrete examples

Imagine an Italian worker who lives in Bellinzona and works in a company in Locarno. In this case, the worker must submit a tax return separate from the Italian one, indicating the following data:

• Income received in Switzerland: CHF 60,000
• Costs incurred for work in Switzerland: CHF 10,000
• Taxes paid in Switzerland: CHF 8,000

Comparisons between practical scenarios

Example 1: An Italian worker resides in Lugano and works in a company of

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