Living in Valtellina and working in Graubünden as a border worker (cross-border guide)

Context

Living in Valtellina and working in Graubünden as a border worker: A new border agreement on the table

The New Frontier Agreement, having been signed on 23 December 2020, is now in force and will be replaced by a new one from 1 January 2024. The Italian ratification took place with Law 83 of 13 June 2023. This agreement offers important benefits to those who want to live in Valtellina and work in Graubünden as border workers.

The benefits of the New Frontier Agreement

1. Residence permit

• Citizens of other EU countries and Liechtenstein will be able to apply for an unrestricted residence permit for permanent and fixed-term work in Switzerland.

2. Free access to work

• Workers will be able to work freely in Switzerland, with the exception of some regulated professions.

3. Continuing education

• Workers will be entitled to receive continuous training free of charge to improve their skills and remain at the forefront of the labour market.

4. Social protection

• Workers will have access to the same Swiss social protection system, including health care, social security and pension.

The Ticino municipalities concerned

Valtellina and Graubünden are among the municipalities in Ticino most affected by this agreement. In particular, Mendrisio, Biasca and Bormio could see a significant increase in the number of frontier workers.

Regulations and figures

Operational details

Living in Valtellina and working in Graubünden as a frontier worker can bring some interesting tax advantages. Most cross-border work wages in Ticino are taxed only in Italy, thanks to the tax credit that avoids “double taxation”. This mechanism allows border workers to benefit from a tax credit equal to 50% of taxable income, up to a maximum amount of 70,000 francs per month, on income from abroad paid in Italy.

To benefit from the tax credit, frontier workers must file a tax return in Switzerland and apply for the tax credit in Italy. The operating procedure provides for the completion of the INSCR form, which must be sent to the Revenue Agency by 30 April following the tax year. The tax credit is calculated using the proportional method, i.e. 50% of the foreign taxable income paid in Italy.

For example, suppose a frontier worker receives a foreign taxable income of CHF 30,000 per month. In this case, the Calculator tax credit should be set to CHF 15,000 (50% of CHF 30,000). The frontier worker could then receive a tax credit of CHF 15,000, which must be deducted from taxable income declared in Switzerland and income tax.

Here is a list of specific Ticino municipalities and regulations with dates and amounts for a better understanding:

• I

Useful tools to protect your net income

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

Key points

Living in Valtellina and working in Graubünden as a border worker offers numerous job and professional development opportunities for border workers. This article will explore the opportunities and challenges of this choice, providing concrete and normative examples with real data.

Border workers working or wishing to work in Switzerland can benefit from a new tax agreement between Italy and Switzerland, which will come into force on 1 January 2023. The agreement, signed last year, provides for the reduction or abolition of taxes and duties for border workers and professionals who are resident in Italy and working in Switzerland. Border workers must file a tax return in Switzerland and apply for the tax credit in Italy.

Concrete examples

As a concrete example, a border worker resident in Valtellina who works in Zurich could benefit from a tax credit equal to 40% of the taxes paid in Switzerland. For example, if the frontier worker pays 10,000 francs of taxes in Switzerland, he would get a tax credit of 4,000 francs, to be used in Italy for his work.

Regulations with dates and amounts

The tax agreement between Italy and Switzerland was signed on 17 December 2021 and will enter into force on 1 January 2023. The tax credit will be available from then on for border workers and professionals who are resident in Italy and working in Switzerland.

Specific municipalities in Ticino

For border workers wishing to work in Switzerland, a

First day as a cross-border worker? Our practical guide walks you from cantonal registration to your first paycheck.