Living in Caslino d 'Erba, working in Ticino: border guide (cross-border guide)

Context

In a nutshell

• New Frontier Agreement from 1 January 2024: revised deductibles and transitional regime
• Annual G leave required to work in Switzerland, renewable every year
• Tax withheld only in Switzerland; Italy applies tax credit through CE framework
• Caslino d 'Erba near the Ticino border, ideal for border commuters

Key facts

• New Agreement: Entered into force 1 January 2024 (signed 23 December 2020, ratified Italian Law 83/2023)
• Excess for new frontier workers: €10,000 annual income exempt from Italian personal income tax
• Excess for old frontier workers: €7,500 with transitional regime until 2033
• Tax at source: Withheld exclusively in Switzerland by the employer
• Permit G: Nominal Swiss residence document, renewable annually
• Bilateral Convention: Italy-Switzerland 9 December 1976, double taxation avoided by tax credit

Moving to Caslino d 'Erba to work in Ticino is a choice that responds to specific economic and geographical needs: the municipality of the province of Como is located a few kilometres from the Swiss border, offering border workers considerable proximity to the Ticino employment centres. From 1 January 2024, with the entry into force of the new Border Agreement between Italy and Switzerland (signed on 23 December 2020 and ratified by Italy with Law 83 of 13 June 2023), the taxation rules have undergone significant changes that directly affect those who work in

Operational details

Taxation on Swiss payroll in Ticino

The monthly payroll of a Ticino border worker is subject to compulsory Swiss deductions. According to the current federal regulations, the employer deducts:

• AVS/AI/IPG (pension and disability insurance): 5.3% of the gross income at the employee's expense
• AD/AC (unemployment and professional injury insurance): 1.1% (with a maximum of CHF 148,200)
• LAINF (professional injury insurance): 0.7-1.5% depending on the activity sector
• LPP (mandatory private pension fund): 7-18% depending on the age group (from 25 years onwards)
• Federal and cantonal Ticino tax on source: variable depending on personal situation and income level

Even residing in Italy, the border worker does not pay IRPEF on the portion of income up to the exemption threshold (€10,000 per year for new border workers, €7,500 for old border workers in the transitional regime). On income exceeding this threshold, Italy applies the IRPEF in three tax brackets: 23% up to €28,000, 35% from €28,001 to €50,000, and 43% above €50,000. However, the Italian tax credit compensates for the tax payments already made in Switzerland, thus avoiding identical double taxation.

Right to choose LAMal and health coverage

The border worker resident in Caslino d'Erba has the right to opt for Swiss compulsory health insurance (LAMal). They can choose to insure themselves with a Swiss health insurance fund — the employer covers 50% of the contribution — or remain covered by the Italian national health service. Swiss health insurance deductibles for an adult vary from CHF 300 to CHF 2,500, plus deductibles for outpatient services.

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Key points

Checklist: the essential steps for relocation

Before relocating to Caslino d'Erba, the future frontier worker must verify and complete a series of administrative and contractual obligations.

1. Confirmed job offer: Obtain a letter of employment or confirmation of employment from the Ticinese employer. The employer must support the G Permit application with the competent Swiss authorities, providing documentation of the job position and contractual stability.

2. G Permit application: Submit the application to the competent office (the Ticinese cantonal authorities coordinated with the SEM — Swiss State Secretariat for Migration). The process takes approximately 2-4 weeks. The permit is nominative and linked to the specific employer.

3. Italian Anagrafe and INPS registration: Once the G Permit is obtained, register as a resident in Caslino d'Erba with the local Anagrafe and notify the INPS. Obtain the Italian tax code (if not already possessed) and, if required by the employer, a VAT number for invoicing.

4. Bank account opening: Open a bank account with a Ticinese or Italian bank to receive the salary in CHF. Many banks offer dedicated accounts for frontier workers with favorable EUR/CHF exchange rates. It is recommended to compare exchange rates using the EUR/CHF exchange rate comparator to identify the best option.

5. Health insurance choice: Choose whether to maintain coverage with the Italian public health service or opt for a Swiss health insurance fund, notifying the decision within the terms set by the bilateral agreements.

6. Tax return: Complete the Italian tax return (model 730 or Redditi PF) using the CE form for foreign tax credit, providing documentation of Swiss source tax payments.

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