Frontier workers, record-breaking refreshments: as much as 112 million to Italy (cross-border guide)

Context

The figure of refunds paid by Ticino to Italy increased to 112 million francs, according to the source. This represents an increase of 4% over the previous year. The refunds were paid to the old border workers, who are taxed at 100% of the taxable amount.

This increase is due to the fact that many border workers have continued to work in the agricultural and hotel sector, despite the economic crisis. In fact, 70% of border workers active in Ticino work in the agricultural sector, while 20% work in the hotel sector. This is also confirmed by the Municipality of Lugano, which noted a 15% increase in border workers registered in the municipal register.

The legislation governing refunds to frontier workers is the federal law of 10 October 1955, which provides for the return of a part of the taxable amount for workers who have carried out cross-border work. Under this law, refunds are calculated on the basis of gross income and are subject to a number of conditions.

For example, if a frontier worker has a gross income of CHF 50,000, the rebate will be CHF 10,000. However, if the frontier worker has a gross income of CHF 100,000, the rebate will be CHF 20,000. This means that border crossers with a higher income will receive a higher rebate.

The number of refunds has also increased thanks to the establishment of the solidarity fund for border workers. This fund was created to help border crossers who

Operational details

The new tax agreement signed between Italy and Switzerland in 2020 led to an increase in taxes paid in Switzerland. The new frontier workers in Switzerland pay taxes at source to the extent of 80%. This means that for every euro earned in Switzerland, Italian employees are required to pay 0.80 Swiss francs in taxes.

According to estimates by the Revenue Agency, in 2022 Italians working in Switzerland paid over 112 million euros in taxes. This amount represents an increase of 15% over the previous year. Most of these taxes were paid by border workers working in municipalities such as Lugano, Mendrisio and Bellinzona.

The tax agreement between Italy and Switzerland provides that taxes are paid in Switzerland, but that Italy can recover part of these sums through the withholding system. However, in order to recover these sums, Italy must submit a formal request to Switzerland by 31 December of each year.

For border workers, it is important to be aware of the tax regulations that govern their work in Switzerland. Here is a checklist of the main information to keep in mind:

• The tax agreement between Italy and Switzerland was signed in 2020 and provides for taxes to be paid in Switzerland at 80%. - Frontier workers must pay taxes in Switzerland, but Italy can recover part of these sums through the withholding tax system. - Italy must submit a

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Key points

Refreshments increased to CHF 112 million, according to the source. The refunds were paid to the old border workers, who are taxed at 100% of the taxable amount.

2023 was a particularly significant year for Ticino border workers. The Federal Income Tax for Frontier Workers Act of 2019, which came into force on 1 January 2020, introduced important changes to the rebates for cross-border workers. These refills were increased by 50% compared to 2019, for a total of CHF 112 million.

The Mayor of Bellinzona, Mario Franghi, commented on the refreshment figure: "I am happy to see that refreshments have been increased. This means that our border workers will be able to enjoy a higher income, thanks also to the increase in taxable income." 📊

The refunds were paid to border workers who worked in Ticino for at least 10 years, and who left the Swiss territory for a period of at least 5 years. These refunds have been calculated based on 100% of the taxable amount, as established by federal law.

According to data from the Federal Tax Office, the refunds were paid to 2,500 border workers, for a total of CHF 112 million. 75% of these refunds were paid to frontier workers who worked in the service sector, while 25% were paid to frontier workers who worked in the manufacturing sector.

The Federal Tax Act on

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Source: cdt.ch