Living in Charvensod and working in Valais as a border worker: what changes (cross-border guide)
The new tax agreement between Italy and Switzerland: how it affects the lives of border workers
Context
In a nutshell
- The New Frontier Agreement was signed on 23 December 2020. The Italian-Swiss Double Taxation Convention was signed on 9 December 1976. The border worker who lives in Charvensod and works in Valais needs to know what changes in his daily life.
Key facts
- What: The border worker who lives in Charvensod and works in Valais needs to know what changes in his daily life. When: December 23, 2020. Where: Valais. Who: The border crossing. Amount: Not yet specified.
The New Frontier Agreement was signed on 23 December 2020. The Italian-Swiss Double Taxation Convention was signed on 9 December 1976. The border worker who lives in Charvensod and works in Valais must know what changes in his daily life.
Living in Charvensod and working in Valais as a border worker: what changes
On 23 December 2020, the New Frontier Agreement was signed, replacing the 1976 Italian-Swiss Double Taxation Convention. This agreement has important consequences for border workers living in Charvensod and working in Valais.
Taxes and levies
Under the new agreement, frontier workers working in Valais and living in Charvensod will be able to benefit from more favourable taxation. In particular, they will be exempt from Swiss taxes on foreign employment income, such as employment income in Italy. This means that border crossers will be able to maintain a
Operational details
The use of the source of income: retained only in Switzerland for border workers. Italy avoids double taxation with the tax credit (EC framework of 730). The New Frontier Agreement was signed on 23 December 2020. The border worker who lives in Charvensod and works in Valais must know what changes in his daily life.
For frontier workers, the source of income is subject to withholding tax only in Switzerland. This means that the border worker pays taxes in Switzerland and not in Italy. However, Italy avoids double taxation with the tax credit, as established by the EC framework of 730.
The tax credit is a tax benefit that allows the border worker to deduct the taxes paid in Switzerland from the taxes due in Italy. This means that the frontier can reduce its tax base in Italy and pay less tax.
For example, if a border worker lives in Charvensod and works in Valais and pays CHF 20,000 in taxes in Switzerland, they can deduct this amount from the taxes due in Italy. If the frontier worker has to pay €10,000 in taxes in Italy, he can reduce his tax base from CHF 20,000 to €10,000.
The border worker must know that the New Frontier Agreement was signed on 23 December 2020. This agreement amends some of the rules regarding border crossers and tax credits.
This convention provides for the two nations to avoid double taxation of border workers' incomes.
For border workers living in Charvensod and working
Useful tools to protect your net income
To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.
Key points
The border worker who lives in Charvensod and works in Valais must know what changes in his daily life. The New Frontier Agreement was signed on 23 December 2020.
The frontier worker must submit the tax return by 31 July of the year following the year in which the employment relationship began. For example, if a border worker starts working in Valais on 1 January 2023, they must submit their tax return by 31 July 2024.
The tax return must be submitted to the Municipality of residence, in this case to Charvensod. The border worker must provide information on his/her income situation, including income and expenses. Revenue may include salary, bank interest, and real estate rents. Expenses may include transportation expenses, lodging expenses, and health expenses.
The border agent must also declare his real estate holdings in Switzerland and abroad. If the border agent owns property in Valais, they must declare the amount of the property's value and maintenance costs. If the frontier worker owns property in Italy, he must declare the amount of the value of the property and the maintenance costs.
The tax return is a legal obligation for border workers. Failure to file a tax return can result in administrative penalties and even revocation of citizenship. It is therefore important for the border guard to ensure that
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