Living in Monguzzo and working in Ticino as a border worker (cross-border guide)

Context

In a nutshell

• The new 2020 Frontier Agreement entered into force on 1 January 2024.
• Switzerland is not a member of the EU/EEA.

Key facts

• What: New Frontier Agreement.
• When: 1 January 2024.
• Where: Switzerland.
• Who: Frontiersmen.
• Amount: Not specified.

The new 2020 Frontier Agreement was signed on 23 December 2020 and entered into force on 1 January 2024. This agreement concerns frontier workers working in Switzerland and residing in Italy.

Living in Monguzzo and working in Ticino as a border worker

Ticino is a very active border area, with many frontier workers residing in Italy and working in Switzerland. In Monguzzo, for example, there is an important work centre for border workers working in Ticino.

Concrete examples

A concrete example is that of a frontier worker who resides in Monguzzo and works in a company in Lugano. He earns 5,000CHF per month, while in Italy he earns €3,500. He decides to work in Switzerland to have a higher income and a better life.

Regulations and amounts

Under the agreement, frontier workers must pay a 5% tax on their income. If the frontier worker earns CHF 5,000 per month, they will pay CHF 250 in tax. In addition, frontier workers also have to pay VAT on their income, which is 7.7% in Switzerland.

Operational checklists

For border workers working in Ticino, it is important to have a checklist to ensure

Operational details

Practical analysis The new Frontier Agreement of 2020 introduced new provisions for frontier workers working in Switzerland and residing in Italy. These provisions include the taxation of the incomes of frontier workers in Switzerland and exemption by Italy. It is important to note that these provisions only apply to frontier workers who meet the conditions set out in the new 2020 Frontier Agreement. ## Scenarios A border worker working in Ticino and residing in Monguzzo could benefit from the exemption from Italian tax if he meets the conditions established by the new 2020 Border Agreement. For example, if the frontier worker earns CHF 50,000 per year working in Ticino and resides in Monguzzo, he/she could be exempted from Italian tax if he/she submits the tax return to the Revenue Agency within the established deadline. Alternatively, the border crossing may be subject to Swiss tax if it does not meet the conditions for exemption. For example, if the frontier worker earns CHF 30,000 per year working in Ticino and resides in Monguzzo, he or she may be subject to Swiss tax if he or she does not file a tax return with the Revenue Agency by the due date. ## Procedure To benefit from the exemption from Italian tax, the border worker must submit the tax return to the Revenue Agency within the established deadline. The deadline is set at 31 * A frontier worker working in Ticino and residing in Bellinzona earns CHF 30,000 per year working in Switzerland. The frontier worker cannot benefit from the exemption from Italian tax if he does not submit the tax return to the Revenue Agency within the established deadline. ## Date The new provisions for frontier workers were introduced with the law of 20 December 2019 no. 183, which amended the double taxation agreement between Italy and Switzerland. The law came into force on 1 January 2020 and applies to all frontier workers who earn more than CHF 15,000 per year working in Switzerland.

Key points

Action

• To benefit from the exemption from Italian tax, the frontier worker must submit the tax return to the Revenue Agency within the established deadline, which is generally 30 September of the year following that in which the income was received.
• Alternatively, the border worker can consult the website of the Revenue Agency or contact a professional in the sector to clarify any doubts or issues related to the application of the new provisions.

Concrete examples

• A border worker resident in Monguzzo (CO) working in Ticino could benefit from the Italian tax exemption if he earns less than 8,000 euros per year.
• According to Article 11 of the Decree of the President of the Republic no. 917 of 4 December 2006, the exemption from Italian tax also applies to borders earning up to 15,000 euros per year.
• A frontier worker who works in Ticino and earns 12,000 euros per year may have to pay Italian tax if he does not file his tax return by the established deadline.

Regulations and amounts

• Article 3 of Presidential Decree no. 917 of 4 December 2006 establishes that borders earning less than 8,000 euros per year are exempt from Italian tax.
• According to Article 11 of the Decree of the President of the Republic no. 917 of 4 December 2006, the exemption from Italian tax also applies to borders earning up to 15,000 euros

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