Living in Novedrate and working in Ticino

Context

Brief Overview

• New Frontier Agreement in force from January 1, 2024
• Source tax only in Switzerland; Italian tax credit (730)
• G permit: option right for LAMal, AVS/LPP mandatory
• Exemption €10,000/year (new); exemption €7,500/year (old, 2024-2033)

Key Facts

• What: New Frontier Agreement between Switzerland and Italy on dependent employment taxation
• When: Entered into force January 1, 2024
• Where: Italian border municipalities and Canton Ticino
• Who: Frontier workers with G permit, Italian Revenue Agency, AFC/ESTV Swiss
• Exemption amount: €10,000/year (new frontier workers), €7,500/year (old, pre-July 17, 2023)
• Regulatory basis: Double taxation convention signed on March 9, 1976, ratified by Italy with Law 83 of June 13, 2023
• Transitional period: 2024-2033 (progressive exemption for old frontier workers)

The New Frontier Agreement between Switzerland and Italy, signed on December 23, 2020, and ratified by Italy with Law 83 of June 13, 2023, came into effect on January 1, 2024. For those living in Italian border municipalities like Novedrate and working in Canton Ticino, this treaty represents a crucial reform in managing dependent employment income taxation.

The agreement is based on the Convention to Avoid Double Taxation between the two countries, signed on March 9, 1976. Prior to 2024, the frontier workers' tax regime was fragmented and had different rules; today, a uniform system governs those living in Italy and receiving a Swiss salary, eliminating the overlap of taxations.

Source tax in Switzerland and Italian tax credit

The central mechanism is linear: the source tax is withheld ONLY in Switzerland on your dependent employment income. Italy does not apply a second parallel withholding. In the Italian 730 model, section CE, the frontier worker declares the gross income from Swiss employment and the source tax already paid, requesting a tax credit. The Italian Revenue Agency calculates the difference between the theoretical Italian IRPEF and the Swiss source tax; if the source tax is higher, the refund goes to the frontier worker; if the Italian IRPEF is higher, the frontier worker pays the balance.

This system avoids double taxation. The 1976 convention provides for this in principle; the New Agreement 2024 defines the calculation with administrative precision.

Frontier workers with a G permit (visa for those living in Italy and working in Switzerland) benefit from significant exemptions. New frontier workers (hired from July 17, 2023, onwards) enjoy a €10,000 annual exemption. Old frontier workers (already frontier workers before July 17, 2023) benefit from a transitional exemption of €7,500 per year from 2024 to 2033, which will decrease subsequently to zero. This temporary protection recognizes the position of those who had already settled with the previous regime.

Use the Frontier Ticino Calculator to check how the Swiss source tax affects your gross income and what refund the 730 should generate.

Operational details

The Economic Advantage: Living in Italy, Swiss Salary

Living in Novedrate and working in Ticino involves a tangible economic calculation. A border worker receives a gross Swiss salary, on which the employer applies mandatory social contributions: AVS/AI/IPG 5.3% (invalidity pension), AD/AC 1.1% (unemployment with CHF 148,200 annual ceiling), LAINF 0.7–1.5% (workplace accident insurance). In addition, the LPP (second-pillar pension fund) payment varies from 7% to 18% depending on the age group, from 25 years onwards.

If the same income were received as a resident in Italy, it would be subject to IRPEF: 23% up to €28,000; 33% from €28,001 to €50,000; 43% over €50,000, plus regional and municipal add-ons (around 3–5%). Comparing: a gross salary of CHF 60,000 (around €62,000 at the current exchange rate) in Switzerland is taxed by the AFC/ESTV (Federal Administration of Contributions) with the federal border tax rate; the same in Italy would involve at least 33% + 4% add-ons = 39% overall. The net difference is significant. The border worker living in an Italian border town saves taxes, as the New Agreement limits Italian taxation and applies the Swiss source primarily.

Italian Tax Declaration and Annual Refund

Every year, the border worker compiles the Italian model 730, section quadro CE (foreign resident, dependent work income with foreign source). Declares the annual gross income received in Switzerland, the tax already paid monthly in the pay slip, and requests the credit. The Revenue Agency compares: applies the corresponding IRPEF rate to the declared income, subtracts the source already paid, and determines whether there is a refund (tax credit) or a balance due. Refunds typically arrive between April and May for 730s submitted in February-March.

Border workers

Useful tools for your case

To verify your within/over 20 km tax scenario, use the net salary calculator and the tax return guide.

Key points

Administrative procedures: G permit and AVS registration

To start the Novedrate-Ticino commuter, the first step is to obtain the G permit. Do not request it directly: the Ticinese employer sends the request to the SEM (State Secretariat for Migration) through the digital SEM system. You provide the employer with the Italian residence certificate (issued by the Novedrate municipality), signed employment contract, front-back photocopy of the passport or identity card. The SEM processes the request in about 2-4 weeks; the permit legally allows you to live in Italy and work in Switzerland.

Once hired, you are automatically registered with the Swiss AVS during the first working day (the employer performs the procedure). You pay AVS/IPG/AI contributions of 5.3% as a dependent from the first paycheck (the employer pays around 50% in paritarian contributions). Your AVS insurance number will be a Swiss number; you do not keep the Italian INPS code for this income, although you maintain accumulated INPS contributions in previous periods if you have worked in Italy before becoming a frontaliere.

Operational checklist: steps for the first month

Weeks 1-2: Sign a contract with the Ticinese employer. The employer sends the SEM application for the G permit (provide documents: Novedrate residence certificate, passport copy, signed contract).

Weeks 3-4: G permit confirmed. Receive a letter or SMS notification from the SEM. Open an Italian bank account with an IBAN (optional but recommended to receive the salary) or communicate a Swiss IBAN to the employer if you have one.

First working day: Bring the original G permit (paper or screenshot of the SMS from the SEM), CMI Italian health card (if you maintain coverage), passport, Italian tax code. The employer registers your insurance number with the AVS at the competent Swiss institution. Documents related to LPP (pension fund according to the second pillar) and LAINF (accidents) insurance are also provided.

By the end of February: Fill out the Italian 730 model with the CE section (frontaliere income in Switzerland, tax already paid, request for tax credit).

May: Tax refund (if due) will be credited to the bank account indicated in the 730 (Italian or Swiss, at your choice).

By June: If you choose to opt for LAMal, communicate the choice to the chosen Swiss institution and provide the CMI Italian cancellation (recommended to avoid duplicate contributions).

Calculate your net salary in real-time with the Frontaliere Ticino calculator. Insert the expected annual gross amount and discover how much you will receive in the paycheck after the Swiss source withholding, as well as the tax refund the 730 should generate in April-May.