Living in Nus and working in Valais as a border worker

Context

In brief

• The new border agreement has been in effect since January 1, 2024
• The franchise for new border workers is €10,000
• The withholding tax is only withheld in Switzerland
• AVS and LPP are mandatory for border workers
• LAMal offers franchises for adults

Key facts

• What: New border agreement
• When: January 1, 2024
• Where: Nus and Vaud
• Who: Border workers
• Amount: €10,000 franchise

The new border agreement, signed on December 23, 2020, has been in effect since January 1, 2024. This agreement introduced a franchise of €10,000 for new border workers, replacing the previous exemption of €7,500 for old border workers. The franchise is valid for work-related income and is only applied in Switzerland, avoiding double taxation with Italy through the 730 CE tax credit.

Advantages of the new agreement

The new agreement offers several advantages to border workers. The higher franchise of €10,000 provides greater tax protection, while the transitional regime for old border workers until 2033 ensures a smoother transition. Additionally, the agreement establishes that the withholding tax is only withheld in Switzerland, simplifying the tax management for border workers.

Disadvantages of the new agreement

Despite the advantages, the new agreement also presents some disadvantages. The franchise of €10,000 is lower than that provided by the old agreement, which amounted to €7,500. Additionally, the new agreement does not include a franchise for non-work-related income, such as bank interest or rental income.

Concrete examples and legal references

To better understand the impact of the new agreement, let's consider a practical example. A border worker living in Nus and working in Vaud, with an annual income of €30,000, will have a franchise of €10,000 applied to their Swiss income. This means that only €20,000 of the income will be taxed in Switzerland, at a rate of 13.8% (2024), resulting in a tax of €2,760. If the border worker had been covered by the old agreement, they would have had a franchise of €7,500, reducing the tax to €2,130. However, with the new agreement, the franchise is higher, offering greater tax protection.

Operational checklist for border workers

1. Verification of the franchise: Ensure that you correctly declare your income in Switzerland to benefit from the €10,000 franchise. 2. Income tax declaration: Submit the income tax declaration in Switzerland by May 31 of the following year. 3. Tax payment: Pay the taxes due by September 30 of the following year. 4. Updating the 730 CE model: Update the 730 CE model for the income tax declaration in Italy, taking into account the 730 CE tax credit.

Comparison of practical scenarios

Let's consider two scenarios for a border worker living in Nus and working in Vaud:

Scenario 1: Border worker with an annual income of €30,000

• Franchise of €10,000
• Taxable income: €20,000
• Tax in Switzerland: €2,760
• 730 CE tax credit: €2,760
• Tax in Italy: €0

Scenario 2: Border worker with an annual income of €15,000

• Franchise of €10,000
• Taxable income: €5,000
• Tax in Switzerland: €690
• 730 CE tax credit: €690
• Tax in Italy: €0

In both scenarios, the border worker does not pay taxes in Italy thanks to the 730 CE tax credit, benefiting from the €10,000 franchise in Switzerland.

Conclusion

The new border agreement of January 1, 2024 introduces a franchise of €10,000 for new border workers, offering greater tax protection compared to the old agreement. However, it does not include franchises for non-work-related income, an aspect to consider for a complete tax planning. Border workers living in Nus and working in Vaud must carefully follow the operational checklist and update the 730 CE model to avoid double taxation and fully benefit from the tax advantages offered by the agreement.

Operational details

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Connections and travel times Living in NUS and working in Valais requires a good system of connections. The city of Nus is well connected with the rest of Ticino through the public transport network and motorways. The journey time to reach the Valais varies depending on the specific destination, but in general it is between 30 and 60 minutes. For example, to reach the center of Monthey, the journey time is about 40 minutes by car, while to reach the regional capital of Sion, the time increases to about 50 minutes. The public transport network, managed by Mobilità Ticino, offers direct connections with the main cities of the Valais, such as Martigny and Sierre, with travel times ranging between 45 and 60 minutes. It is also important to consider the journey times to reach border towns such as Brig and Domodossola, which can vary between 40 and 60 minutes by car, depending on traffic. #

Cost of living

The cost of living in NUS is generally lower than in Valais. However, the differences may vary depending on the specific areas and services available. For example, the average cost of an apartment for rent in Nus is around 900-1100 CHF per month, while in Valais the average cost can exceed 1500-1800 CHF per month. The cost of living in Nus is also influenced by the availability of essential services, such as supermarkets, pharmacies and banks, which are easily In conclusion, living in Nus and working in Valais can be a beneficial choice for those looking for a balance between cost of living and quality of life. It is important to consider all factors before transferring and consult an attorney to ensure that you comply with all tax and residency regulations.

Useful planning tools

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

Key points

What to Consider Before Moving

Before moving to Nus and working in Valais, it's important to consider various factors. The cost of living, travel times, and quality of life are among the most important factors to evaluate. For example, the cost of living in Nus is significantly lower than in Lugano or Bellinzona, with an average rent of 1,200 CHF for a one-bedroom apartment and 1,800 CHF for a two-bedroom apartment. Additionally, the quality of life is high thanks to the proximity to Lake Lugano and Lake Como, and the numerous recreational activities offered in the area.

"The cost of living in Nus is significantly lower than in Lugano or Bellinzona."

Transfer Procedure

The transfer procedure requires several steps. First, you need to obtain a residence permit in Switzerland. Next, you must register with the Swiss tax office for tax treatment. Finally, it's important to open a bank account in Switzerland to manage your financial transactions. For example, the residence permit can be obtained through the "Work and Residence" (LRE) or the "Work and Residence for Experts" (LRE-E) program. The LRE requires a minimum income of 100,000 CHF per year, while the LRE-E requires a minimum income of 120,000 CHF per year. Additionally, you need to demonstrate that the income will be paid in Switzerland and that you intend to reside in Switzerland for at least one year.

Useful Tools

To facilitate the transfer, there are several useful tools available. The tax calculator is a fundamental tool for estimating taxes and exemptions. For example, the Ticino tax calculator indicates that an income of 100,000 CHF per year could result in a tax of approximately 30,000 CHF. Additionally, the residence permit comparator can help you choose the most suitable permit for your needs. For example, the Ticino residence permit comparator indicates that the LRE is more suitable for those with an average income, while the LRE-E is more suitable for those with a high income.

Operational Checklist

Here is an operational checklist for the transfer: 1. Residence Permit: Verify the requirements of the LRE or LRE-E program. 2. Tax Registration: Register with the Swiss tax office within 30 days of arriving in Switzerland. 3. Bank Account: Open a bank account in Switzerland within 10 days of arrival. 4. Insurance: Purchase health insurance and accident insurance. 5. Residence: Find a house or apartment within 3 months of arrival.

Comparison of Practical Scenarios

Here is a comparison of the cost of living in Nus and Lugano:

• Rent: 1,200 CHF in Nus vs 2,000 CHF in Lugano.
• Food: 200 CHF per week in Nus vs 300 CHF per week in Lugano.
• Transportation: 100 CHF per week in Nus vs 200 CHF per week in Lugano.

Fiscal Regulations

Here are some fiscal regulations to consider:

• Income Tax: The income tax rate in Switzerland is 12% for incomes up to 100,000 CHF, 13% for incomes between 100,000 CHF and 1,000,000 CHF, and 14% for incomes above 1,000,000 CHF.
• Tax Exemption: The tax exemption for Ticino residents is 14,000 CHF per year.
• Municipal Taxes: The municipal taxes in Nus are 1.5% of the taxable income.

For further information and tools, visit our tax calculator.