50% remote border guards with no impact on contributions and pensions (cross-border guide)

Context

In detail

The New Frontier Agreement is an important step forward to protect border workers residing in Ticino who work remotely at 50%, preventing the impact of their incomes on cantonal tax policy. The exemption from tax at source – which applies to all salaries – means that frontier workers will not have to pay tax on their salary.

Who are the beneficiaries?

The measure concerns border workers who work remotely at 50%: this means that at least 50% of their income must come from activities carried out remotely. The list may include freelancers, consultants, technicians, and other remote service workers.

How much does this exemption cost?

The exemption from tax at source does not have a cost for border crossers. This means they don't have to pay tax on their pay, as long as they continue to work remotely at 50%.

When does it take effect and where?

The new measure comes into force on 1 January 2024, for the whole of Italian Switzerland and the Canton of Ticino. In other words, border workers resident in Ticino will continue to be exempted from the tax at source, regardless of their activities or place of residence.

How it works

To benefit from the exemption, border workers resident in Ticino must continue to work remotely at 50%. This means that at least 50% of their income must come from activities carried out by

Operational details

The exemption from tax at source for frontier workers working remotely at 50% is one of the latest changes by the Ticino government to make life easier for these workers. This benefit, introduced as a result of the COVID-19 pandemic, means that border workers with an income from work not subject to corporate income tax will not have to pay tax on their pay, which can lead to considerable savings for many of them. This exemption is valid for all border workers who work remotely at 50%, regardless of the sector or type of employment contract.

The impact of this measure on border workers' contributions and pensions is relatively limited. Most social security benefits are already calculated using the income information provided by the employer. Therefore, the exemption from tax at source will not significantly affect the contributions and pensions of frontier workers. However, to ensure that contributions and pensions are calculated correctly, frontier workers should continue to regularly provide the company with the necessary data on their income.

For border workers residing in Ticino, exemption from source tax can mean a significant reduction in the taxes paid, which in turn can lead to an increase in their monthly balances. For example, a frontier worker with an annual income of CHF 40,000 working 50% remotely might have

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Key points

50% REMOTE FRONTIER WORKERS WITH NO IMPACT ON CONTRIBUTIONS AND PENSIONS

To benefit from the exemption from the tax at source, border workers who work remotely at 50% in Ticino must verify that they have no other income that is subject to the tax and submit their income tax return in which the exemption will be applied.

For example, a border worker resident in Ticino with a net income of 50,000 gross francs per month, who works remotely at 50%, will not pay source tax if he has no other income. If, on the other hand, you earn another income from work, such as a free business or a financial asset, you will have to pay it regularly.

To check if he has other income, the frontier worker can consult his tax liabilities or contact the relevant Labour Office.

Also, it is important to note that the exemption is not valid for border workers who work 100% remotely. For these workers, the Labour Office of Lugano has provided a circular explaining how it will be possible to determine their exemption or not, taking into account their application of the regular conditions of employment and their income.

For a frontier worker who works 100% remotely, for example, if he earns 60,000 gross francs per month and has another working income of 10,000 gross francs per month, the Lugano Labour Office will be able to determine that the frontier worker has other income and will not be able to benefit from the exemption.

In this case, the

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