What is the difference between €7,500 and €10,000 deductible?

The deductible of €7,500 applies to former frontier workers (already holders of G Permit before 17 July 2023) until 31 December 2033, according to the transitional regime of the New Agreement 2024. The €10,000 deductible applies to all new frontier workers immediately, and to old ones from 1 January 2034. The deductible represents the annual income exempt from Italian personal income tax; beyond this threshold, the ordinary rate (23%, 35% or 43% depending on the tier) is applied in full on all the excess amount.

How does the tax credit and rebate work?

Switzerland takes the tax at source directly from the paycheck (on average 3–8% depending on the canton). When you file your tax return in Italy (730 or Unico), communicate the Swiss tax paid through the CE framework and attach the Quellensteuer certificate. The Agency calculates personal income tax on all taxable income according to ordinary rates, then recognizes a credit equal to the taxes paid in Switzerland. If the Swiss taxes exceed the Italian IRPEF, the border worker receives a rebate (refund).

Does the distance from the border (Lugano vs Chiasso) change the tax regime?

No, the New 2024 Agreement does not provide for different regimes depending on the distance from the border. The flat-rate exemption (€10,000 for new frontier workers, €7,500 for old ones) applies identically to those residing in Chiasso, Brogeda, Lugano, Mendrisio, Locarno, Bellinzona or any other municipality in Ticino. The only variant is the status of old or new frontier according to the date of acquisition of the G Permit.

Are the AVS and LPP contributions paid in Switzerland deductible from the Italian personal income tax?

No, the AVS/AI/IPG contributions (5.3% to be paid by the employee) paid in Switzerland are NOT deductible from the Italian personal income tax. They remain a deduction at the Swiss source and accumulate Swiss pension benefits. The second LPP pillar (7–18% depending on age, up to CHF 148,200 of coordinated income) is depreciated on the Swiss paycheck, but provides no further deductions in Italy. The contributions result in a Swiss income, which is then taxed as pension income when disbursement begins.

If I move to Switzerland, what happens to Permit G?

If you cease to reside in Italy and move to live in Switzerland, you lose the right to the G Permit (reserved for border workers with Italian residence). You will switch to an ordinary C Permit of domicile in Switzerland, subject to the ordinary Swiss tax regime, not the preferential border regime. Notify the employer, the Italian Revenue Agency and the new Swiss municipality of residence of the change of residence.

Calculation of border taxes over 20 km from the border (cross-border guide)

Di Marco Ferrari · Published on 26 August 2026

View of Lugano at sunset with lakeside promenade and Alpine mountains in background

New 2024 Agreement: €10,000 deductible for new frontier workers, Swiss source tax and Italian tax credit. Calculation guide with examples.

Context

In a nutshell

New Frontier Agreement in force from 1 January 2024: simplifies the tax regime
Flat-rate exemption: €10,000 new frontier workers, €7,500 old (transitional 2024–2033)
Swiss source tax, Italian tax credit: no double taxation

Key facts

What: Redefinition of the border tax regime with a single flat-rate exemption
When: January 1, 2024 (Agreement signed December 23, 2020)
Where: Italy-Switzerland Frontier (Ticino, Valais, Graubünden)
Who: G Permit Holders
Excess amount: €10,000 (new), €7,500 (old, until 31 December 2033)
Agreement: Signed on 9 December 1976 (against double taxation)

On 1 January 2024, the New Frontier Agreement entered into force, signed on 23 December 2020 and ratified by Italy with Law 83 of 13 June 2023. For those who reside in Italy and work in Switzerland, the tax regime has been radically rewritten: the calculation of taxes no longer depends on complex income thresholds, but is based on a single flat-rate exemption that drastically simplifies the declaration.

For new frontier workers (those who acquired the status after 17 July 2023), the exemption is €10,000 gross per year exempt from Italian tax. For old border crossers (already holders of G Permit before 17 July 2023), a transitional regime applies: a deductible of €7,500 until 31 December 2033, which will automatically rise to €10,000 from

Operational details

Which benefits remain valid regardless of residence

Many border workers wonder if tax breaks vary according to the distance from the border. The New 2024 Agreement does not provide for territorial differentiations: with equal income and status (old/new border crossing), the flat-rate exemption is identical for those residing in the canton of Ticino at any distance from the border.

What does not change are the deductions and deductions related to the composition of the family unit and assets in Italy:

Deductions for dependent children remain full if the children reside in Italy
First home mortgage deduction in Italy remains valid at 19%
Deductions for medical expenses incurred in Italy are allowed
Income tax on Italian real estate income is added to income from work (no exemption for distance)

None of these benefits vary according to the km between home and border.

How IRPEF applies beyond the deductible

Concrete example: a frontier worker earns CHF 65,000 gross in Switzerland (about €59,600 at the average exchange rate). It has an excess of €10,000 (it is a new border crossing).

Italian taxable income = €59,600 – €10,000 = €49,600

Application of personal income tax rates:

Amount up to €28,000: €28,000 × 23% = €6,440
Amount from €28,001 to €49,600: €21,600 × 35% = €7,560
Total income tax due: €14,000

But the Swiss employer has already withheld a source tax in Switzerland (typically 3–8% depending

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

Step-by-step procedure for calculating taxes

The procedure became standardized from January 1, 2024. Here are the concrete steps:

Step 1: Verify your cross-border worker status Are you a long-time cross-border worker (holding Permit G before July 17, 2023)? Apply €7,500 exemption. Are you new? Apply €10,000. The date of first acquisition of Permit G is decisive.

Step 2: Convert gross Swiss income to euros Your employer will report the annual gross salary in CHF. Convert it at the average monthly exchange rate of the year (available on the Italian Revenue Agency or Bank of Italy website). Example: CHF 65,000 ÷ 1.092 (hypothetical average exchange rate) = €59,524.

Step 3: Subtract the exemption Taxable income = €59,524 – €10,000 = €49,524.

Step 4: Calculate IRPEF according to standard tax brackets Apply 23% up to €28,000, 35% from €28,001 to €50,000:

€28,000 × 23% = €6,440
€21,524 × 35% = €7,533
Total IRPEF: €13,973

Step 5: Claim the tax credit in your tax return From the following year, in Form 730 or Unico, attach the Swiss withholding tax certificate (Quellensteuer-Bescheinigung) issued by your employer. In section CE, report the amount withheld in Switzerland. The Agency will recognize a corresponding credit, reducing the IRPEF owed. If the Swiss withholding exceeds the Italian IRPEF, the cross-border worker is entitled to a refund.

Deadlines and essential documentation

Key deadlines for cross-border workers are:

…

Frequently Asked Questions

What is the difference between €7,500 and €10,000 deductible?: The deductible of €7,500 applies to former frontier workers (already holders of G Permit before 17 July 2023) until 31 December 2033, according to the transitional regime of the New Agreement 2024. The €10,000 deductible applies to all new frontier workers immediately, and to old ones from 1 January 2034. The deductible represents the annual income exempt from Italian personal income tax; beyond this threshold, the ordinary rate (23%, 35% or 43% depending on the tier) is applied in full on all t
How does the tax credit and rebate work?: Switzerland takes the tax at source directly from the paycheck (on average 3–8% depending on the canton). When you file your tax return in Italy (730 or Unico), communicate the Swiss tax paid through the CE framework and attach the Quellensteuer certificate. The Agency calculates personal income tax on all taxable income according to ordinary rates, then recognizes a credit equal to the taxes paid in Switzerland. If the Swiss taxes exceed the Italian IRPEF, the border worker receives a rebate (r
Does the distance from the border (Lugano vs Chiasso) change the tax regime?: No, the New 2024 Agreement does not provide for different regimes depending on the distance from the border. The flat-rate exemption (€10,000 for new frontier workers, €7,500 for old ones) applies identically to those residing in Chiasso, Brogeda, Lugano, Mendrisio, Locarno, Bellinzona or any other municipality in Ticino. The only variant is the status of old or new frontier according to the date of acquisition of the G Permit.
Are the AVS and LPP contributions paid in Switzerland deductible from the Italian personal income tax?: No, the AVS/AI/IPG contributions (5.3% to be paid by the employee) paid in Switzerland are NOT deductible from the Italian personal income tax. They remain a deduction at the Swiss source and accumulate Swiss pension benefits. The second LPP pillar (7–18% depending on age, up to CHF 148,200 of coordinated income) is depreciated on the Swiss paycheck, but provides no further deductions in Italy. The contributions result in a Swiss income, which is then taxed as pension income when disbursement be
If I move to Switzerland, what happens to Permit G?: If you cease to reside in Italy and move to live in Switzerland, you lose the right to the G Permit (reserved for border workers with Italian residence). You will switch to an ordinary C Permit of domicile in Switzerland, subject to the ordinary Swiss tax regime, not the preferential border regime. Notify the employer, the Italian Revenue Agency and the new Swiss municipality of residence of the change of residence.