Living in Valganna, working in Ticino as a border worker

Context

In brief

• G permit for cross-border workers: renewed annually, full rights in Switzerland
• New 2024 agreement: tax relief up to CHF 7,500 (legacy cross-border workers) or CHF 10,000 (new ones)
• Withholding tax: deducted only in Switzerland, no double taxation
• AVS/LPP contributions: 5.3% (AVS) and 7–18% (LPP based on age), mandatory

Key facts

• What: Moving from Valganna (Italy) to work in Ticino (Switzerland) as a cross-border worker
• When: New agreement in force since January 1, 2024 (signed December 23, 2020)
• Where: Valganna (Varese province) → Ticino; border crossings: Brogeda, Chiasso, Gaggiolo
• Who: G permit cross-border worker; Italian Revenue Agency (Agenzia Entrate), Swiss SECO/SEM/AFC
• Amount: Annual tax relief of CHF 7,500 (legacy) or CHF 10,000 (new cross-border workers)

Those who decide to move from Valganna and work in Ticino enter a specific legal and tax regime, which is radically different from Italian employment. The new agreement between Italy and Switzerland, which came into force on January 1, 2024, has redesigned the rights, duties, and benefits of the modern cross-border worker. It is not just a simple change of workplace: it is an entry into a social, tax, and pension protection system structured according to Swiss standards.

What is the G permit

The G permit (cross-border worker) is the standard visa for those who reside in Italy and work daily in Switzerland. It is valid for one year and must be renewed annually at the Migration Section of the Department of Institutions of the Canton of Ticino. Unlike the B permit (residency), the G permit does not allow for a change of domicile to Switzerland: the cross-border worker remains domiciled in Valganna and returns daily through the border crossings.

The rights of the G permit holder are full: unlimited access to the Swiss labor market, complete social protection, trade union protections, and protection against occupational accidents. They can choose whether to enroll in the Swiss health insurance (LAMal) or maintain Italian coverage (CMI, European Health Insurance Card). Pension rights (AVS, LPP, AI) are managed entirely by Switzerland and accumulate automatically during the employment period.

The new 2024 agreement and tax relief

As of January 1, 2024, the new cross-border worker agreement introduces a tax exemption on employment income: CHF 7,500 annually for cross-border workers already registered before July 17, 2023 (transitional regime 2024–2033); CHF 10,000 for new cross-border workers thereafter. This means that amounts up to these limits are not subject to tax adjustments if the Italian tax return (section CE of the 730 model) includes the tax credit on the Swiss withholding tax.

Tax adjustments, administered by the Italian Revenue Agency, are the mechanism to avoid double taxation between Italy and Switzerland. The Convention between the two countries, signed on March 9, 1976, establishes that withholding tax is deducted solely in Switzerland (never in both countries), while Italy avoids double taxation by granting a tax credit in the tax return (section CE of the 730 model).

Withholding tax: how it works

Withholding tax is the primary mechanism governing the taxation of cross-border workers. In Switzerland, the employer deducts a rate from the gross salary each month: this is the withholding tax, administered at the federal/cantonal level according to federal and cantonal laws, and managed administratively by the AFC (Federal Tax Administration) centrally and by the cantonal tax offices in Ticino.

Critical point: the withholding is performed only in Switzerland. Italy does not make any further tax withholding on the employment income of the cross-border worker. The Italo-Swiss Double Taxation Convention (March 9, 1976) guarantees this. Therefore, the cross-border worker does not suffer from double taxation: they pay a single tax in Switzerland and, if their Italian tax return documents the amount paid (section CE, tax credit), the Revenue Agency recognizes the payment already made and, if applicable, issues a tax adjustment (refund). This is completely different from those working in Italy: in that case, the tax is withheld in Italy and no exemption mechanisms exist. For the Ticino cross-border worker, the principle is unique: one tax, one jurisdiction (Switzerland).

Operational details

Contributions, insurance, and financial planning

Living in Valganna and working in Ticino does not just mean taxation: it is a comprehensive Swiss social protection system that the border worker must integrate with their Italian situation. For those working in Switzerland, social contributions are mandatory and structured into distinct pillars, each with a precise function.

The Swiss contribution system

AVS (Old-age and Survivors Insurance) + AI (Disability Insurance) + IPG (Daily Indemnity): The dependent border worker pays 5.3% of their salary (dependent contribution) on all remunerations. The counterpart employer pays an equivalent amount. These contributions finance the Swiss state pension (AVS), which the border worker receives from 64 years (woman) or 65 years (man), provided they have paid at least one year of continuous contributions.

AD (Unemployment Insurance) + AC (Accident Insurance): AD costs 1.1% (with a CHF 148,200 annual salary cap); AC is the employer's responsibility. They protect the border worker in case of job loss or workplace injury.

LAINF (Work Accident and Disease Insurance): 0.7-1.5% at the employer's expense.

LPP (Professional Old-age Pension Insurance, Second Pillar): Mandatory contribution from age 25. The contribution rate is calculated based on age: varies from 7% to 18% of the coordinated salary (gross income minus CHF 884 annually). For example, at 30 years, the contribution rate might be around 7.5%; at 50 years, around 15%. This fund accumulates its own capital and is redeemed at retirement (at 64/65 years) in the form of a pension or capital, representing a significant pension wealth.

LAMal: Swiss health insurance

The border worker has the right to opt: they can enroll in Swiss health insurance (LAMal, mandatory in Switzerland) or maintain Italian coverage (CMI, European Health Card). The choice is personal and depends on medical needs, costs, and hospital network preferences.

If they choose LAMal, the deductible (minimum annual excess) ranges from CHF 300 to CHF 2,500 for adults; the monthly premium depends on the insurer, canton (Ticino), and chosen coverage. If they remain in Italy, CMI covers essential services in Switzerland (e.g., emergency) but not everything: often the border worker complements with a private Swiss complementary coverage. The choice must be documented to the employer and the Tax Agency for fiscal and administrative transparency.

Planning: practical scenarios

A border worker with a monthly gross salary of CHF 4,500 (~EUR 4,700) suffers approximate monthly deductions: AVS/AI 5.3% (~CHF 240); AD 0.5% (~CHF 22); LPP 8% (~CHF 360 on coordinated salary); LAMal forfaitary (~CHF 350-500); withholding tax (variable by canton, age, marital status, approximately 8-12%, ~CHF 360-540).

Estimated net: around CHF 2,650-2,850 (~EUR 2,750-2,950), against CHF 4,500 gross. The difference is significant, but includes complete protection (pension, health, unemployment, accidents). For comparison: an Italian scenario with an equivalent EUR 4,700 (gross) would suffer IRPEF (23% up to 28,000€ annually) + INPS contributions (~8.19%) + any professional funds (if self-employed), for a similar or lower net, but often without structured LPP (lower pension wealth).

The Valganna border worker, despite paying more contributions in absolute value, accumulates significant LPP capital (second pillar) and has recognized European AVS protection. The future pension income is generally higher than that of an Italian worker with an equivalent income.

Key points

Procedure practical: the steps for transferring

Who lives in Valganna and decides to work in Ticino must complete a series of bureaucratic steps. It's not complicated, but it requires coordination between Italian and Swiss offices and attention to administrative deadlines.

Step 1: Ensure job offer

Before starting formal procedures, a written job offer from a Swiss employer (in Ticino) is required. This will be the key document to request a G permit. The employer must report the hiring to the SECO (State Secretariat for Economic Affairs) or SEM (State Secretariat for Migration), according to Ticino cantonal protocols.

Step 2: Request G permit

Once employed, the border worker instructs the employer (or, in some cantons, can submit personally) to submit the G permit application to the Migration Section of the Department of Security of the Canton of Ticino. The application must attach: employment contract, copy of passport or identity document, and any conduct certificate. The permit is notified by post and has a validity of 1 year (renewable automatically if the employment relationship continues).

Step 3: Swiss tax declaration

Once employed, the employer begins to operate the monthly withholding tax on salary. At the end of the year (December/January), the border worker receives the Certificate of Withholding Tax (Swiss document), necessary for the Italian declaration and for the calculation of annual rebates.

Step 4: Italian tax declaration and CE form

In Italy, the border worker completes the model 730 (or ordinary declaration if preferred) at the competent Revenue Agency (that of the province of residence, Varese for Valganna). In the CE form, they insert the amount of Swiss withholding tax paid during the year. The Revenue Agency applies the tax credit and, if due (and if the annual income exceeds CHF 7,500/10,000), issues a rebate (refund). The franchise further reduces the taxable income in Italy.

Step 5: Health insurance and LAMal option

Concurrently, the border worker chooses LAMal (Switzerland) or CMI (Italy). If they choose LAMal, they must register with a Ticino insurance company within the terms (usually, within 1-3 months from the start of employment). If they remain in Italy, they inform the employer and the Revenue Agency of their choice to maintain CMI.

Step 6: AVS/LPP registration

The employer automatically registers the border worker with the Swiss AVS insurance (managed at the federal level) and with the company LPP. No additional action by the border worker is required, but they must verify with the employer that the registration has been made within the legal terms (usually, within 5 days from the start of employment). This registration is the basis for the accumulation of pension rights.

Practical tools

To check the pay slip, exact contributions, and estimated net salary according to the 2024-2025 tax rates, use the border worker salary calculator. This tool integrates the specific deductions for the G permit in Ticino. You can also consult the Revenue Agency directly for clarification on rebates and CE forms, or contact the Migration Section of the Canton of Ticino.

Remember: the procedure is streamlined if the employer cooperates and if each bureaucratic step is followed in a timely manner. The modern border worker of Valganna has access to structured social and fiscal protection, provided they complete the annual Italian declaration and maintain the active G permit.