Living in Besano and working in Ticino as a border worker

Context

In a nutshell

• New Frontier Agreement in force from 1 January 2024.
• taxation in Switzerland with tax credit in Italy.
• The €10,000 threshold in Article 4 of Italian Law No. 83/2023 applies exclusively to employment income earned continuously and exclusively by Italian residents in a foreign border area or neighbouring country, as referred to in Article 1(175) of Law No. 147/2013; it is neither a general allowance nor an exemption from Swiss withholding tax.
• Old cross-border workers remain taxed only in Switzerland (Art. 9 of the 2020 Agreement).

Key facts

• What: New Italy-Switzerland Border Agreement
• When: Effective January 1, 2024
• Where: Canton of Ticino and border municipalities (Besano)
• Who: Federal Tax Administration (FTA)
• New deductibles: 10,000 euros
• Old cross-border workers remain taxed only in Switzerland (Art. 9 of the 2020 Agreement).

Commuting between Besano and the Canton of Ticino is part of an updated regulatory framework, defined by the New Frontier Agreement signed on 23 December 2020 and ratified by Law 83 of 13 June 2023. For those residing in the municipality of Varese and serving in Swiss territory, the current legislation establishes a system of taxation at source that guarantees the elimination of double taxation. Unlike in the past, the border crossing that falls under the new regime is subject to a tax withholding made exclusively in Switzerland, while Italy recognises a tax credit for taxes paid across borders, to be declared in the EC framework of Form 730.

The distinction between old and new frontier workers

The transition to the new tax system takes place according to strict time criteria. Those who were already employed as border workers before 17 July 2023 fall under the transitional regime, which will last until 31

Operational details

The daily organization of work for those who live in Besano implies a careful planning of social and tax deductions in the paycheck. The Swiss system provides for several mandatory deductions that affect the net income received. These include AVS/AI/IPG contributions of 5.3% for the employee, the unemployment insurance quota (AD/AC) set at 1.1% up to a salary ceiling of CHF 148,200, and accident insurance premiums (LAINF) ranging from 0.7% to 1.5%. From the age of 25, the contribution to the second pillar (PPI) is also provided, with rates between 7% and 18% depending on the age group.

Income management and taxation

From the point of view of the Italian IRPEF, the income produced in Switzerland must be carefully assessed. The Italian personal income tax rates applied to the bracket exceeding the deductible follow the parameters in force: 23% up to 28,000 euros, 33% for the portion between 28,001 and 50,000 euros, and 43% for the portion exceeding 50,000 euros. The tax calcolatore is an indispensable tool to simulate the impact of these rates on your monthly net. It is necessary to remember that health insurance, known as LAMal, is mandatory for all residents and workers in Switzerland; border workers in possession of a G permit can exercise the right of option, choosing between the Swiss system (with deductibles between 300 and 2500 CHF) and the Italian one. Careful management

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

For those living in Besano, the procedure to start or continue working in Ticino requires compliance with some fundamental bureaucratic steps. The first step is obtaining the G permit, issued by the competent cantonal authorities (SEM), which authorizes cross-border work. Once hired, the worker must ensure that the employer correctly applies the withholding tax, as provided by the AFC directives. It is advisable to periodically check your payslip to ensure that social security deductions (AVS, LPP, LAINF) comply with legal thresholds.

Procedures and operational tools

The choice between different health insurance options must be made within the deadlines provided by the right of option for LAMal. There is no automatic procedure, therefore the worker is required to submit the request for exemption or affiliation within the deadlines established by the authorities. Regarding social security, it is appropriate to monitor the AVS account statement and the second pillar (LPP) benefits annually, which represent the basis of future pension planning. Daily commuting, which affects border crossings such as Gaggiolo or Ponte Tresa, requires careful management of travel times, given the variability of cross-border traffic. To delve into your tax situation and optimize your net income, it is recommended to constantly use the calculator for salary simulations. Furthermore, for an accurate assessment of the cost of living, you can consult the guides on the cost of living in Ticino, which offer a comparative framework useful for those who need to balance income in CHF and expenses in EUR. Maintaining organized documentation, including monthly payslips and tax certificates provided by the Swiss employer, remains the most effective strategy to correctly manage your tax position in Italy and Switzerland, ensuring compliance with the Revenue Agency and cantonal administrations.