Living in Jovençan, working in Valais as a border worker

Context

In brief

• Permit G: residence Italy, work Switzerland, taxes withheld in Switzerland
• Swiss withholding tax + Italian 730 declaration = no double taxation
• AVS 5.3%, LPP 7–18%, LAMal with option right
• For Article 9 of the Agreement, “old frontier workers” are people who met the tax requirements and worked in Graubünden, Ticino or Valais on 17 July 2023 or during the period from 31 December 2018 through 17 July 2023. Article 9 keeps covered employment income taxable exclusively at source in Switzerland; other workers follow the ordinary regime, with ordinary taxation in Italy, a credit for Swiss tax and Swiss withholding at 80% of the ordinary rates. The €10,000 figure in Article 4 of Italian Law No. 83/2023 is only the income limit referred to in Article 1(175) of Law No. 147/2013; it is not a general allowance for new frontier workers. Sources: ESTV factsheet (Italian) · Agreement, Art. 9 · Law No. 83/2023, Art. 4.

Key facts

• What: Living in Valle d'Aosta and working in Valais
• Who: Cross-border workers residing in Italy (Permit G)
• Where: Jovençan (IT) — canton Valais (CH)
• When: Effective from January 1, 2024 (New Cross-Border Agreement)
• Permit: G (residence Italy, work Switzerland)
• Tax: Withheld in Switzerland, 730 declaration in Italy with tax credit
• Contributions: AVS 5.3% employee, LPP 7–18% by age bracket

Living in Jovençan and working in Valais is a conscious choice for many cross-border workers who aim to balance the economic advantages of a Swiss salary with the Italian cost of living. The legal framework supporting this arrangement is defined by Permit G, the Italian-Swiss Tax Convention of March 9, 1976, and the New Cross-Border Agreement effective from January 1, 2024.

Permit G is the administrative tool that allows the worker to legally reside in Italy while maintaining an employment relationship with a Swiss company. Unlike other residence permits (A, B, C), the G permit is specifically designed for cross-border work and is tied to the continuity of employment with the Swiss employer.

Taxation: How does the taxation work?

From a tax perspective, the system is clearly regulated: the income from employment is taxed in Switzerland, through withholding tax (directly withheld by the employer monthly). Italy does not apply federal income taxes on Swiss employment income, thanks to the principle of the bilateral convention. However, the cross-border worker is still required to file an annual tax return in Italy (model 730 or Redditi PF), indicating the foreign income and the Swiss tax credit already paid: this mechanism of the CE section of the 730 model documents the absence of double taxation and allows, if necessary, to obtain refunds if the Swiss tax withheld has been higher than the Italian tax obligations.

Pension contributions constitute a separate item from tax liability. The AVS (Alters- und Hinterlassenenversicherung, the first Swiss pillar) provides a contribution rate of 5.3% for the employee, further paid by the employer for an equal 5.3%. To this is added the contribution for disability insurance (AI) and involuntary unemployment (IPG), combined at 1.1% up to the annual salary limit of CHF 148'200.

Health insurance coverage (LAMal, mandatory insurance in Switzerland) provides cross-border workers G with the option right: it is possible to insure with a Swiss LAMal entity with a deductible between CHF 300 and CHF 2'500, or to remain enrolled in the Italian National Health System with possible private integration, depending on personal choices of coverage and cost.

Operational details

Tax management and contributions during work

The daily life of a cross-border worker living in Jovençan and working in Valais is marked by tax and social security obligations on both sides of the border. Understanding the flow of payments avoids surprises in the paycheck and at the time of the annual declaration.

The gross amount agreed in the Swiss contract is reduced monthly by three main components. Withholding tax is calculated and paid directly by the Swiss cantonal authorities; the rate depends on income, marital status, and residence and is not a fixed percentage but increases with income. This is the only income tax payment on work. AVS/AI/IPG contributions amount to 5.3% (AVS) plus 1.1% (AI/IPG) for a total of 6.4%, paid to the Swiss social security institution; the employer pays the same amount. The LPP (Professional Pension) varies between 7% and 18% of the salary, depending on age — contributions increase with years of service — and is paid directly to the company's LPP entity.

Allowances and 2024 news

As of January 1, 2024, the New Cross-Border Agreement (signed on December 23, 2020, ratified by Italy with Law 83 of June 13, 2023) has introduced allowances deductible from Swiss taxable income. Old cross-border workers remain taxed only in Switzerland (Art. 9 of the 2020 Agreement). The €10,000 limit is not a general allowance: Article 4 of Italian Law No. 83/2023 applies it only to the income referred to in Article 1(175) of Law No. 147/2013.

Declaration in Italy and tax credit

By May 30 of the following year, the cross-border worker submits the declaration in Italy. In the 730 model (or Redditi PF), they report the gross income received in Switzerland and the withholding tax paid (indicated in the employer's certificate). In the CE section of the 730, the Swiss tax credit is fully recognized, excluding further federal/regional Italian taxation. If the Swiss tax has been excessive for the Italian income profile, the cross-border worker can obtain a refund (rebate) from the Revenue Agency; if the Swiss tax has been lower, the deficit is generally covered by the municipal surcharges that may be due.

Cost of living and housing choice

Jovençan offers a significantly lower cost of living compared to areas in Valais, Switzerland, but daily commuting, public or private transportation costs, and the impact of vehicle maintenance expenses must be considered. In addition to the value of the mortgage or rent (generally more convenient in Italy), the cross-border worker must consider car insurance costs (generally lower in Italy), fuel, and maintenance, as well as daily consumption expenses (food, utilities). The price ratio Italy/Switzerland remains in favor of Italy, with differences ranging from 15% to 40% on average across consumption categories.

Useful planning tools

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

Key points

Procedure and practical checklist: how to start

Moving to Jovençan to work in Valais follows a logical procedure that combines the Italian and Swiss sides. Here are the concrete steps to start the process.

The first action is to sign an employment contract with a Swiss company in the Valais canton. The contract specifies the role, gross salary, working hours, duration (fixed or indefinite), and workplace. Once signed, the employer communicates the details to the competent cantonal department (SEM or cantonal migration office) to start the G Permit procedure.

In parallel, the cross-border worker contacts the competent Questura (Immigration Office) for the Italian territory where they intend to reside. The required documentation generally includes the signed employment contract, residence certificate or declaration of residence intent, Italian criminal record certificate, bank statement, valid passport or identity document, and a specific application form for the G Permit. Processing times vary from 30 to 60 days.

Registration with the registry office and social security

Once the G Permit is obtained, it is necessary to register the residence with the Italian municipality (registry office). This act is fundamental for subsequent INPS registration and tax domicile. Then, register with INPS as an employee residing in Italy; INPS will communicate the registration number, necessary for data communication to the Swiss employer. Obtain the tax code from the local tax office (or download it online if you have SPID).

Provide the Swiss employer with your bank details for the salary (Italian or Swiss account), as well as the INPS number and Italian tax code. The employer must register this data in the payment systems and communicate it to the Swiss social security authorities (AVS, LPP).

Within the prescribed deadlines (generally 30–60 days from the start of the employment relationship), communicate to the Valais canton whether you want Swiss LAMal health insurance or if you will maintain Italian coverage. The choice is personal; if you choose LAMal, you will receive the documentation from the insurance entity and the details for premium payments.

First tax return

Ensure you have received from the employer the certification of the withholding tax paid. By May 30 of the following year, submit the 730 form (or Redditi PF) in Italy, indicating the gross Swiss income and tax credit. This document formalizes the cross-border worker status and concludes the first administrative cycle.

Pre-move checklist:

• Signed Swiss employment contract
• G Permit requested and received from the Questura
• Residence registered with the municipal registry office
• INPS registration completed
• Italian tax code obtained
• Bank details communicated to the employer
• Health insurance chosen (LAMal or SSN)
• First tax return prepared

Useful tools and resources: Net salary calculator for cross-border workers — simulate your monthly earnings considering withholding tax, AVS, and LPP. Guide to cross-border workers' tax return — read the step-by-step procedure for the 730 form.