Italian border marriage, Swiss citizen: tax regime (cross-border guide)

Context

The New Frontier Agreement, signed on 23 December 2020, enters into force on 1 January 2024. This agreement brings significant changes for frontier workers, including tax at source and refunds.

Italian border marriage, Swiss citizen: tax regime

The tax regime for Italian and Swiss border marriages is subject to specific rules. According to Article 3 of the New Frontier Agreement, Swiss citizens who marry an Italian citizen are considered “frontiersmen” and are subject to Italian tax rules.

Concrete examples

Suppose a Swiss citizen of Lugano marries an Italian citizen of Como. The couple decides to reside in Lugano, in the Canton of Ticino. In this scenario, the couple is subject to Italian and Swiss tax rules.

The tax at source is 20% on income from work, while refunds are 10% on income from work. Suppose the Swiss citizen has a working income of CHF 60,000 per year, while the Italian citizen has a working income of EUR 40,000 per year (about CHF 45,000).

The couple will have to pay the Italian source tax of 20% on the total working income, which amounts to CHF 105,000 (CHF 60,000 + CHF 45,000). The tax at source will therefore be CHF 21,000 (20% of CHF 105,000).

Italian rebates are 10% of total working income, which amounts to CHF 105,000. Refunds will therefore be CHF 10,500 (10% of CHF 105,000).

Rules

Operational details

Italian border marriage, Swiss citizen: tax regime

It is important to understand the implications of these changes and how they apply to your personal situation. The cross-border marriage between an Italian citizen and a Swiss citizen can have significant repercussions on the tax regime of both spouses.

In Switzerland, the tax regime is based on the principle of “tax domiciliation”. This means that an individual is considered a tax resident in Switzerland if they have their main residence in the country. If an Italian citizen marries a Swiss citizen and decides to move to Switzerland, they could be considered a tax resident in Switzerland.

However, it is important to note that Switzerland and Italy have a double taxation agreement that provides for the reduction of the income taxation of both countries. This means that spouses will not be taxed twice on the same income.

Here are some concrete examples:

• If an Italian citizen earns CHF 50,000 per year and decides to move to Switzerland after marriage, they could be considered a tax resident in Switzerland. However, thanks to the double taxation agreement, his income will only be taxed in Switzerland, and not in Italy.
• If a Swiss citizen earns 100,000 Swiss francs a year and decides to move to Italy after marriage, they could be considered a tax resident in Italy. However, thanks

Useful tools to protect your net income

To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.

Key points

Italian border marriage, Swiss citizen: tax regime

Frontier Ticino provides tools and aids to help border workers navigate these new rules. In today's article, we will explore the tax regime for border marriages between Italian and Swiss citizens, with a focus on Ticino.

What are border weddings?

Border marriages are unions between two people who have different nationalities and reside in two neighbouring countries. In the case of Ticino, Italians and Swiss can choose to live together in one of the two countries, while maintaining their nationality and tax rights.

Tax regime for border weddings

Switzerland and Italy have a tax cooperation agreement that provides for the mutual taxation of the spouses' income. This means that if an Italian citizen marries a Swiss citizen and decides to live in Ticino, they will have to pay taxes in Switzerland, while the Swiss spouse will have to pay taxes in Italy.

Concrete example

Let's imagine that we have two people, Luca and Francesca, who get married and decide to live in the municipality of Bellinzona, Switzerland. Luca is an Italian citizen and Francesca is a Swiss citizen. Both have an income of CHF 50,000 per year. According to the tax cooperation agreement, Luca will have to pay taxes in Switzerland, while Francesca will have to pay taxes in Italy.

Taxes in Switzerland

In 2022, Switzerland introduced