Living in Fagnano Olona and working in Ticino as a border worker (cross-border guide)

Context

In a nutshell

• The Italian-Swiss Double Taxation Convention was signed on 9 December 1976.
• The new tax agreement for border workers was signed on 23 December 2020 and will be in force from 1 January 2024.

Key facts

• What: New tax agreement for border workers
• When: 1 January 2024
• Where: Ticino, Switzerland
• Who: Frontiersmen
• Amount: Not yet specified

The new tax agreement for border workers was signed on 23 December 2020 and will be in force from 1 January 2024. This agreement was signed by Switzerland and Italy to avoid double taxation of border workers' income. Border workers will be exempt from tax at source in Switzerland and will be able to benefit from the tax credit in Italy.

Living in Fagnano Olona and working in Ticino as a border worker

If you are an Italian citizen living in Fagnano Olona and working in Ticino as a border worker, this agreement could have a significant impact on your tax situation. In fact, double taxation of income is a common problem for border workers working in Switzerland, as they are subject to two different tax systems.

The new tax agreement for frontier workers has been signed to avoid this double taxation and ensure that frontier workers are treated fairly and equitably. According to the agreement, frontier workers will be exempt from tax at source in Switzerland and will be able to benefit from the tax credit in Italy.

For example, if

Operational details

The use of the Italian-Swiss convention against double taxation has allowed border workers to avoid double taxation of income. Border crossers are subject to lower taxation than Swiss and Italian citizens. Border workers can benefit from the tax credit in Italy and are exempt from tax at source in Switzerland.

The Italian-Swiss Double Taxation Convention was signed on 14 May 1936 and entered into force on 1 January 1938. This convention is intended to avoid double taxation of income and to prevent tax evasion. The convention establishes that income is subject to taxation only in one of the two countries, depending on the residence of the entrepreneur.

A concrete example is the case of an entrepreneur who lives in Fagnano Olona and works in Ticino. The entrepreneur can benefit from the Italian-Swiss convention against double taxation and pay lower taxation than a Swiss or Italian citizen. Under Ticino law, incomes are subject to taxation at 7.2% for incomes up to CHF 20,000 and 11.5% for incomes over CHF 20,000. In Italy, taxation is 23% for incomes up to EUR 15,000 and 39% for incomes over EUR 15,000.

Another example is the case of an entrepreneur who lives in Fagnano Olona and works in Ticino, but also has a property in Italy. The entrepreneur can benefit from the tax credit in Italy and pay a tax

Useful tools to protect your net income

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

Key points

To live in Fagnano Olona and work in Ticino as a border worker, you must have a residence permit. It is possible to apply for a residence permit at the Border Authority. You can also check the Border Authority's website for up-to-date information on the residence permit application procedure.

According to the Federal Law of 16 December 2005 on Immigration (LImm), foreigners who intend to work in Switzerland must obtain a residence permit. In particular, foreigners who intend to work in Ticino must obtain a type B residence permit, which allows them to work in Switzerland.

To apply for the type B residence permit, foreigners must submit an application to the Border Authority, accompanied by a series of documents, including:

• a valid passport
• a birth certificate
• a marriage certificate (if applicable)
• a work certificate issued by the company that hired them
• a health insurance certificate

In addition, foreigners must demonstrate that they have sufficient economic resources to support themselves in Switzerland. According to the Federal Law of 23 March 2007 on Assistance to Foreigners (LAss), foreigners must have at least CHF 2,500.00 per month available for themselves and for each family member.

Foreigners who intend to work in Ticino can choose between different residence options. For example, they can choose to

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