Living in Pollein and working in Valais as a border worker

Context

In brief

• Frontaliers Italy-Valais regulated by 1976 Convention and New Agreement effective from January 1, 2024
• Source tax withheld in Switzerland; tax credit in Italy via Schedule CE of 730
• Permit G: application to SEM/VAM with employment contract and documentation
• AVS/LPP/LAMal: mandatory rights and contributions for frontaliers

Key facts

• What: Frontalier tax regime Italy-Switzerland with income exemptions
• When: New Agreement in force from January 1, 2024 (signed December 23, 2020)
• Where: Pollein (Aosta Valley, Italy) — Valais (Switzerland), cross-border
• Who: Frontaliers holding Permit G
• Convention: Signed March 9, 1976, prevents double taxation
• Source tax: Withheld exclusively in Switzerland, not in Italy
• Exemption: CHF 7,500 (existing frontaliers pre-7/17/2023) or CHF 10,000 (new)

Those living in Pollein, a small municipality in the Aosta Valley, and working in the Swiss Valais face a specific tax regime regulated by the Italy-Switzerland Convention of March 9, 1976, and the New Frontalier Agreement that entered into force on January 1, 2024. The basis of this regime is to avoid double taxation between the two countries: source tax is withheld exclusively in Switzerland by the Federal Tax Administration (AFC/ESTV), while Italy guarantees a tax credit through the 730 declaration by completing Schedule CE.

To work legally in Valais as an Italian resident, you need Permit G (frontalier) issued by the Swiss State Secretariat for Migration (SEM) and the Migration Office (VAM) of the destination canton. The procedure requires an employment contract, a letter from the employer, and Italian residency documentation.

The tax regime from 2024 onwards

The New Frontalier Agreement introduces differentiated income exemptions: frontaliers already employed before July 17, 2023 retain the CHF 7,500 exemption until 2033 (transitional regime), while new frontaliers from this date benefit from a CHF 10,000 exemption. These exemptions reduce Swiss taxable income and, consequently, the source tax withheld by the employer or the AFC. Italy recognizes the tax credit through the 730 declaration, Schedule CE: attach the Swiss withholding certificate and the Tax Agency applies the credit automatically, thus preventing the frontalier from paying twice on the same income.

In Valais, the Swiss federal rate for source tax varies based on the canton and salary. Switzerland is not an EU member, so the application of the bilateral Convention is decisive. Mandatory contributions impact directly on the paycheck: AVS/AI/IPG 5.3% (employee), AD/AC 1.1% with a maximum limit of CHF 148,200, LAINF 0.7–1.5%.

Operational details

Frontier's social and social rights

Those who work in the Valais with Permit G pay mandatory contributions to the Swiss system AVS (Old Age and Survivors Insurance), AI (Disability Insurance) and IPG (Loss of Earnings Allowance), in the total amount of 5.3% borne by the employee. These payments guarantee the Swiss old-age pension from the legal age (currently 65 for men, 64 for women), as well as coverage for disability and death. Contributions are fully deductible from the Swiss tax base.

The second mandatory pillar, LPP (Occupational Pension Plan), comes into play when the annual salary exceeds CHF 21,330. The rate varies by age group from 25 years (7% up to 35 years, progressively up to 18% over 55 years). LPP contributions are also deductible from Swiss taxes. Frontier workers who have paid in AVS/LPP in Switzerland and INPS in Italy can request INPS refunds for the periods in which they contributed to the Italian system before moving.

Health insurance: choice between Swiss and Italian system

Border workers with G Permit have the right of option on health coverage: they can maintain Italian insurance through INPS (continuity of Italian social security) or sign a LAMal (private Swiss health insurance) with deductibles ranging from CHF 300 to CHF 2,500 for adults, depending on the product chosen.

Useful planning tools

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

Key points

Procedure for Obtaining Permit G

The application for Permit G is submitted to the Swiss State Secretariat for Migration (SEM) through the Migration Office (VAM) of the Valais canton where the work activity takes place. Required documents: copy of the employment contract, employer's letter confirming employment, Italian residence certificate (issued by the Pollein municipality), valid identity document, completed VAM application form. SEM examines the application and issues Permit G, usually granted within 2–4 weeks if documentation is complete. Once in possession of Permit G, the cross-border worker must register with the Italian INPS within the prescribed terms to maintain mandatory enrollment in the Italian social security system (optional if the Swiss system is chosen, but highly recommended). Permit G is generally renewable annually if prerequisites persist (continuous employment, stable residence). Upon termination of the employment relationship, the cross-border worker has a tolerance period before having to leave Swiss territory; in cases of short-term unemployment, Swiss unemployment benefits (unemployment insurance, AD/AC 1.1%) may apply if enrolled.

Tax Deadlines and Annual Declarations

Withholding tax in Switzerland is automatically deducted by the employer and requires no further action from the cross-border worker, except verifying the correct application of the income exemption (CHF 7,500 or CHF 10,000 depending on the category). The Italian income tax return must be submitted by May 30 (subject to extensions) by completing Model 730-1. In the CE framework, the following items must be indicated: Swiss dependent work income, withheld Swiss withholding tax, claimed tax credit. The Revenue Agency processes the declaration and communicates the outcome (refund, compensation, or residual debt) within the year. AVS/LPP contributions paid in Switzerland are annually documented by the employer or an AFC/ESTV certification (certification of deductions form, available online). These data must be archived for potential checks or refund requests. If the cross-border worker is also enrolled in the Italian INPS (for mandatory or voluntary regime), they must ensure there are no duplicate payments in the same calendar year. Use the salary calculator to simulate net salary and deductions on a Valais cross-border worker's pay slip and plan the annual budget.