Italian border workers in Canton Ticino are on the decline (cross-border guide)

Context

In a nutshell

• Italian border guards in Canton Ticino on the decline.
• New border agreements in force from 1 January 2024.
• Impact on taxation and work permits.

The cross-border labour market is going through a phase of profound transformation. In the main entry poles such as Chiasso, Mendrisio and Lugano, official data show a contraction in inflows from Lombardy and Piedmont, accelerated by the entry into force of the new tax agreement of 1 January 2024. This agreement redesigned the competing taxation, introducing a withholding tax in Switzerland of up to 80% of the ordinary tax and the obligation to declare in Italy for newcomers, who benefit from an exemption set at 10,000 euros per year.

For workers active in municipalities such as Stabio or Novazzano, the management of double taxation requires careful accounting planning.

Operational 📊 checklist for workers:

• Check the date of hiring with respect to the watershed of January 1, 2024 to determine the status of old or new border worker.
• Calculate the impact of the IRPEF deductible on income above 10,000 euros received in Swiss francs.
• Apply for the updated G permit at the Migration Office of the Canton of Ticino.
• Monitor the regime of 45 working days per year for any smart working in Italy, regulated by the ancillary bilateral agreement.

Operational details

Key facts

• What: Trend reversal in cross-border workflows with a contraction of G permits issued to cantonal authorities.
• When: Official recognition referring to the consolidated statistical data from the entry into force of the new tax agreement of 17 July 2023, operational from 1 January 2024.
• Where: Canton of Ticino, with particular impact in the poles of Lugano, Mendrisio and Chiasso.
• Who: Workers residing within 20 kilometres of the Italian border.
• Amount: New concurrent taxation that provides for a withholding tax in Switzerland up to 80% of the ordinary tax, with an obligation to declare in Italy for new hires.

The cross-border labour market in Canton Ticino is experiencing a significant decline in permits for workers residing abroad, marking a turning point for the regional economy.

The new tax regime is redistributing professional choices between Italy and Switzerland.

In border municipalities such as Mendrisio and Chiasso, companies are registering a slowdown in applications from Italy, historically attracted by higher net wages but now held back by the doubled tax levy.

Checklist to assess the economic convenience of the workplace in Ticino:

• Calculation of net income under the new scheme for workers who entered after 17 July 2023.
• Verification of the economic treatment in key sectors such as metalworking, health and financial services.
• Analysis of

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

The new border agreement, signed on 23 December 2020 and officially entered into force on 1 January 2024, is redefining the labour market between Italy and Switzerland. This agreement generated a first decline in the influx of Italian workers towards the Canton of Ticino, in particular in the urban centres of Lugano, Mendrisio and Chiasso.

But what does it mean concretely for those who cross the border every day? Italian workers continue to suffer a complex tax burden compared to their Swiss colleagues, divided between old and new regimes. The agreement distinguishes between new hires and old frontier workers. For the former, taxation is now competitive: Switzerland withholds up to 80% of taxes at source, while Italy taxes the difference by applying a deductible of 10,000 euros per year and eliminating double taxation thanks to the tax credit.

To manage this transition, here is an operational checklist for workers:

• Check the date of hiring to determine whether you belong to the old or new tax regime
• Request the updated salary certificate from the Ticino employer
• Monitor compliance with the rule of 20 kilometers from the Italian provincial borders for benefits
• Submit the tax return in Italy by filling in the appropriate framework for foreign income

The new agreement ensures greater transparency but requires accounting attention.

A worker with a gross income of CHF 80,000

Evaluating a Ticino job offer? Simulate your net payslip: enter gross salary, marital status and municipality for a detailed breakdown.

Source: varesenoi.it