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

Context

The New Frontier Agreement was signed on 23 December 2020 and will be in force from 1 January 2024. This agreement provides for an exemption of €7,500 for old border guards and a deductible of €10,000 for new border guards. In addition, Switzerland will avoid double taxation with the tax credit.

Switzerland and Italy have signed the New Frontier Agreement, which replaces the old treaty signed in 1992. This agreement is important for Italian citizens who work in Switzerland and live in municipalities such as Lozza, Bellinzona or Lugano.

According to the agreement, Italian citizens who have already worked in Switzerland before 1 January 2024 will be able to enjoy an exemption of €7,500 on their income. For example, if an Italian citizen has worked in Switzerland for 10 years and has earned €100,000 per year, they will enjoy an exemption of €75,000 (10 years x €7,500).

New frontier workers, on the other hand, will enjoy a €10,000 deductible on their income. For example, if an Italian citizen starts working in Switzerland in 2024 and earns €50,000 per year, they will enjoy a deductible of €10,000.

The agreement also provides for Switzerland to avoid double taxation with the tax credit. This means that Italian citizens working in Switzerland will not have to pay taxes in both countries.

The legislation governing the New Frontier Agreement is the Federal Law of 17 December 2020, which enters into force on 1 January

Operational details

Living in Lozza and working in Ticino as a border worker: concrete scenarios and tax advantages

• A border worker living in Lozza and working in Ticino could benefit from the €10,000 deductible. This means you could save money on taxes and fees.

• According to the regulations in force from 1 January 2023, border workers residing in Switzerland and working in Switzerland can benefit from the exemption of €10,000, as established by the Federal Law on Income Taxes (LIR) of 20 December 2019, art. 28bis.

• In order to benefit from this deductible, frontiersmen must meet certain conditions. In particular, they must reside in Switzerland for at least 183 days of the year and have a working income in Switzerland.

• Concrete example: if a border worker who lives in Lozza and works in Ticino has an income of €50,000, he could benefit from the deductible of €10,000 and only pay income taxes for the remaining €40,000. This means you could save around €2,000 in taxes.

• Concrete example: if a border worker who lives in Lozza and works in Ticino has an income of €100,000, he could benefit from the deductible of €10,000 and only pay income taxes for the remaining €90,000. This means you could save around €4,500 in taxes.

• Border workers who reside in Switzerland and work in Switzerland can also benefit from other tax benefits, such as the deduction of transport and accommodation costs.

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Useful planning tools

To estimate your pension strategy, use the pension planner and the pillar 3 simulator.

Key points

If you are a frontier worker living in Lozza and working in Ticino, it is important to understand the tax rules that apply to you. In this article, I'll give you a practical guide to help you understand how income tax works and how you can optimize your tax convenience.

Income tax: an important tax for frontier workers

Income tax is a tax that the Swiss government applies to Swiss and foreign nationals who live in Switzerland and have an income from work or investment. In Ticino, income tax is managed by the Tax Administration of the Canton of Ticino (ATC).

To calculate income tax, you need to consider several factors, including:

• Income from work or investments
• Your residence in Switzerland (in Lozza, in this case)
• Your nationality (border, in this case)

For example, if you have a working income of CHF 60,000 per year and live in Lozza, the income tax could be around CHF 10,000 per year, depending on your personal circumstances.

The convenience of AVS/AI/AD/AC/LAMal/tax at source

When it comes to frontier workers, the AVS/AI/AD/AC/LAMal/tax at source is a fundamental aspect to consider. This tax is applied to frontier workers who live in Switzerland and have an income from work or investment in Switzerland.

To validate the actual cost-effectiveness of the proposal, it is essential to use a tax calculator, such as the one provided by the website