What is the New Frontier Agreement and when did it come into force?

The New Frontier Agreement, signed on 23 December 2020 and ratified by Italy with Law 83/2023, entered into force on 1 January 2024. It redefines taxation for those who work in Switzerland and reside in Italy, introducing the tax credit system via the EC framework of 730 and distinguishing between old border workers (exemption €7,500) and new border workers (exemption €10,000).

What is the difference between old and new border crossers for deductions?

Border workers already in this condition before 17 July 2023 are 'old' and enjoy an exemption of €7,500 per year under the transitional regime 2024–2033. The 'new frontier workers' have an annual excess of €10,000. This difference directly affects taxable income in Italy and generates an average annual tax advantage of €2,500 for new border crossers, at least until 2033 when the special regime expires.

How do you calculate refreshments and when do they arrive?

Refunds are the difference between taxes paid in Switzerland (source tax) and those due in Italy (income tax). They are calculated using the CE framework of 730. The procedure: the border worker declares the net Swiss income and the tax paid, the Revenue Agency crosses with the Swiss tax authorities, and if a positive balance emerges, the Italian State reimburses. Times vary, but it generally takes 60–120 days from the 730 filing.

What documents are needed to fill in the CE framework of 730?

Work certificate from Switzerland with gross income and taxes paid, pay slips (February-December) with details of the tax at source, declaration of tax domicile in Italy, tax code and border permit number (category G or B). Convert income from CHF to EUR using the average annual rate of the tax year. If you have additional Italian income (rent, etc.), declare it in the appropriate boxes of 730.

What is the personal income tax rate I pay as a border worker?

The rate depends on the Italian taxable income net of the exemption (old €7,500) or deductible (new €10,000): 23% up to €28,000, 35% from €28,001 to €50,000, 43% over €50,000. However, the Swiss source tax credit offsets some or all of the IRPEF burden, often generating rebate. Switzerland also applies federal contributions (AVS/AI/IPG 5.3%) and various insurance funds.

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New Frontier Agreement from 2024: how to recover taxes with 730. Exemption €7,500 (old) vs €10,000 (new). Explained returns and tax credit.

Context

In a nutshell

New Frontier Agreement in force from 1 January 2024: the tax system changes
The tax credit in 730 offsets the source tax paid in Switzerland
Exemption €7,500 (old cross-border commuters) vs €10,000 (new) from 2024
Refunds: the mechanism to recover taxes paid in excess

Key facts

What: New Border Agreement redefines double taxation CH-IT
When: Effective January 1, 2024 (signed December 23, 2020)
Where: Frontier between Switzerland and Italy
Who: Italian Government (Law 83/2023) and Switzerland
Exemption amount: €7,500 (old) vs €10,000 (new)
Income tax rate: 23% up to €28,000; 35% €28,001- €50,000; 43% over €50,000

On 1 January 2024, the New Frontier Agreement entered into force, signed between Italy and Switzerland on 23 December 2020 and ratified by Italy with Law 83 of 13 June 2023. This agreement completely redefines how taxation works for those who work in Switzerland and reside in Italy.

For frontier workers, the tax system is divided into two phases: first Switzerland withholds the tax at source directly from the paycheck (calculated on AVS/AI/IPG at 5.3% plus any cantonal contributions), then Italy allows a tax credit through the EC framework of the tax return (730). This mechanism allows Italy to avoid double taxation according to the Italian-Swiss Convention signed on 9 December 1976.

Transitional regime and

Operational details

Refunds and tax credits: the practical mechanism

Refunds are the heart of the system for the frontaliers. When a frontaliere pays the withholding tax in Switzerland, it is calculated on federal and cantonal rates that together can exceed the actual Italian tax burden. The difference between what is paid in Switzerland and what is due in Italy is refunded: these are the refunds.

The CE form 730

To apply for a refund (or to check if Switzerland still has to pay it), the procedure goes through the Italian form 730. In the model, the CE form accommodates information on income earned in Switzerland, taxes paid to the Swiss tax authority (withholding tax), and tax credits claimed. The Italian Tax Authority (and upstream the MEF for bilateral agreements) cross-references the data with the Swiss tax authority. If a balance in favor of the frontaliere emerges, a refund is generated. If, on the other hand, a debt to Italy emerges, the frontaliere will have to pay the balance.

The CE form has been designed to prevent double taxation on foreign income. The Italo-Swiss Convention of December 9, 1976, establishes that the right to tax belongs to the State in which the income is produced. In this case, Switzerland taxes the employment income (withholding tax), and Italy grants an equivalent tax credit to compensate.

Scenario: how it works in practice

Imagine a frontaliere (old category, so with an exemption of €7,500) who earns €40,000 annually gross in Switzerland. In Switzerland, he pays a withholding tax that varies depending on the canton of residence (fundamental for taxation). For simplicity, let's assume CHF 4,500 annually in withholding taxes (this is an illustrative example; the actual figure varies from canton to canton based on the combined federal and cantonal rates).

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Key points

How to Apply: Step-by-Step Procedure

Step 1: Gather the Documentation

For the 730 with the CE form, you need to collect a series of essential documents. First, the work certificate from Switzerland: it must contain the gross income earned and the total amount of taxes paid. Second, the pay stubs from February to December that document the withholding tax every month. Third, the declaration of tax residence in Italy, with the name of the municipality of residence. Finally, the Italian tax code and the number of the frontaliere permit (category G or B according to current regulations). If you have only one source of income (work in Switzerland), it is sufficient; if you also have Italian incomes (rental of a property, for example), you will need to document them separately.

Step 2: Complete the CE Form

The CE form is dedicated exclusively to foreign income taxed abroad. In this section of the 730, you will need to enter the name of the foreign state (Switzerland), the type of income (Employment), and the gross amount of foreign income converted to EUR (convert from CHF at the average annual rate). Then declare the taxes paid in Switzerland (monthly withholding tax documented by the pay stubs), and the tax credit claimed based on the double taxation agreement. If the frontaliere also has Italian incomes (e.g., rental of a property), these must be declared separately in the real estate income section (section B of the 730), not in the CE form.

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Frequently Asked Questions

What is the New Frontier Agreement and when did it come into force?: The New Frontier Agreement, signed on 23 December 2020 and ratified by Italy with Law 83/2023, entered into force on 1 January 2024. It redefines taxation for those who work in Switzerland and reside in Italy, introducing the tax credit system via the EC framework of 730 and distinguishing between old border workers (exemption €7,500) and new border workers (exemption €10,000).
What is the difference between old and new border crossers for deductions?: Border workers already in this condition before 17 July 2023 are 'old' and enjoy an exemption of €7,500 per year under the transitional regime 2024–2033. The 'new frontier workers' have an annual excess of €10,000. This difference directly affects taxable income in Italy and generates an average annual tax advantage of €2,500 for new border crossers, at least until 2033 when the special regime expires.
How do you calculate refreshments and when do they arrive?: Refunds are the difference between taxes paid in Switzerland (source tax) and those due in Italy (income tax). They are calculated using the CE framework of 730. The procedure: the border worker declares the net Swiss income and the tax paid, the Revenue Agency crosses with the Swiss tax authorities, and if a positive balance emerges, the Italian State reimburses. Times vary, but it generally takes 60–120 days from the 730 filing.
What documents are needed to fill in the CE framework of 730?: Work certificate from Switzerland with gross income and taxes paid, pay slips (February-December) with details of the tax at source, declaration of tax domicile in Italy, tax code and border permit number (category G or B). Convert income from CHF to EUR using the average annual rate of the tax year. If you have additional Italian income (rent, etc.), declare it in the appropriate boxes of 730.
What is the personal income tax rate I pay as a border worker?: The rate depends on the Italian taxable income net of the exemption (old €7,500) or deductible (new €10,000): 23% up to €28,000, 35% from €28,001 to €50,000, 43% over €50,000. However, the Swiss source tax credit offsets some or all of the IRPEF burden, often generating rebate. Switzerland also applies federal contributions (AVS/AI/IPG 5.3%) and various insurance funds.