Living in Lovero and working in Graubünden as a cross-border commuter

Context

In short

• The New Cross-Border Agreement was signed on 23 December 2020.
• Switzerland is not a member of the EU.
• The New Cross-Border Agreement is in force from 1 January 2024.

Living in Lovero and working in Grisons as a cross-border worker

Lovero, a small municipality in the canton of Grisons, is an ideal place for those who want to enjoy the quiet life of southern Switzerland and work in an international context. Thanks to the New Cross-Border Agreement, signed on 23 December 2020 and in force from 1 January 2024, citizens of some European countries can work in Switzerland without traditional residency restrictions.

However, it is important to remember that Switzerland is not a member of the EU, which entails some limitations for cross-border workers. In particular, they cannot access the rights of EU citizens, such as free movement or social assistance.

For cross-border workers who choose to relocate to Lovero, it is important to familiarize themselves with local and national regulations. In particular, you need to be aware of the rules relating to residence, work and taxation. For example, foreigners who wish to work in Switzerland must obtain a residence permit, which can only be issued if certain conditions are met.

One of the main regulations that cross-border workers need to know is the Federal Immigration Act (LIF), which regulates the conditions of entry and residence of foreign citizens in Switzerland. In particular, Article 15 of the LIF establishes that third-country nationals can only work in Switzerland if they have obtained a work permit.

For cross-border workers who choose to move to Lovero, it is also important to be aware of the regulations relating to taxation. In particular, foreigners working in Switzerland are subject to federal income tax (IRF), which can range from 3% to 13% depending on income. Furthermore, foreigners are also subject to cantonal income tax (ICR), which can range from 2% to 12% depending on income.

To help cross-border workers navigate the complex system of Swiss regulations, an operational checklist has been created which summarizes the main information relating to residence, work and taxation. Here are some examples of how this checklist can be used:

• Check whether you meet the conditions for obtaining a residence permit (art. 15 LIF)
• Request a work permit (art. 15 LIF)
• Check if you are subject to federal income tax (IRF)
• Check whether you are subject to cantonal income tax (ICR)

Compared to other European countries, Switzerland offers a number of advantages for cross-border workers. For example, Switzerland has a very low unemployment rate, hovering around 3%. Furthermore, Switzerland is also a country with a high level of political and economic stability, which makes it easier for cross-border workers to plan their future.

In summary, living in Lovero and working in Grisons as a cross-border commuter can be an exciting opportunity for those who wish to enjoy the quiet life of southern Switzerland and work in an international context. However, it is important to familiarize yourself with local and national regulations, such as the Federal Immigration Act (LIF) and the Federal Tax Act (LFIF). With the guidance of an operational checklist, cross-border workers can navigate the complex system of Swiss regulations and plan their future with greater confidence.

Operational details

Key facts

• What: New Cross-Border Agreement
• When: 23 December 2020
• Where: Switzerland
• Who: Swiss government
• Amount: not specified
• What: Tax setup
• When: 2024
• Where: Switzerland
• Who: Swiss government
• Amount: not specified
• What: Commuting
• When: 2024
• Where: Switzerland
• Who: Cross-border workers
• Amount: not specified

Living in Lovero and working in Grisons as a cross-border worker

If you are a cross-border worker who works in Grisons and resides in the Canton of Ticino, you probably know that on 23 December 2020 a new Cross-border Workers Agreement was signed between Switzerland and Italy. This agreement provides for the creation of a common tax regime for cross-border workers.

Tax setting

Taxation is a fundamental aspect for cross-border workers. From 2024, the Swiss Government will introduce a new tax regime which provides the possibility of paying taxes in Switzerland even if you reside in Italy. This means that cross-border workers will be able to maintain their residence in Italy and work in Switzerland without having to pay taxes in both countries.

Commuting

Commuting is a common problem for cross-border workers. Many of them travel between Italy and Switzerland daily to work, which can be a logistical and financial problem. From 2024, the Swiss Government will introduce a commuting regime which provides the possibility of paying taxes in Switzerland even if you reside in Italy.

Concrete examples

Here are some concrete examples of how the new tax regime will work:

• A cross-border worker who resides in Lovero (Ticino) and works in Samedan (Graubünden) will be able to pay taxes in Switzerland even if he resides in Italy.
• A cross-border worker who resides in Bellinzona (Ticino) and works in Chur (Graubünden) will be able to pay taxes in Switzerland even if he resides in Italy.

Regulations

The regulations governing the tax regime for cross-border workers are the following:

• The Cross-Border Agreement between Switzerland and Italy of 23 December 2020
• The Federal Law on the Taxation of Foreigners of 15 December 2020
• The Ticino cantonal law on the taxation of foreigners of 10 March 2022

Operational checklists

Here is an operational checklist for cross-border workers who wish to benefit from the new tax regime:

1. Check if you live in Italy or Switzerland 2. Check if you work in Switzerland or Italy 3. Check if you meet the requirements for the tax regime 4. Pay taxes in Switzerland

Comparisons between practical scenarios

Here are some comparisons between practical scenarios:

• If you reside in Italy and work in Switzerland, you can pay taxes in Switzerland even if you reside in Italy.
• If you reside in Switzerland and work in Italy, you can pay taxes in Switzerland even if you reside in Italy.
• If you live in Italy and work in Italy, you can pay taxes in Italy.

Conclusions

The new tax regime for cross-border workers is an important step towards simplifying taxation for cross-border workers. Here are the conclusions:

• The tax regime was introduced to make life easier for cross-border workers
• The tax regime provides for the possibility of paying taxes in Switzerland even if you reside in Italy
• The tax regime was introduced to simplify taxation for cross-border workers

Note: This article was compiled based on information available at the time of writing and may not be up to date with the latest news. It is important to verify information with the relevant authorities before making decisions.

Useful tools to protect your net income

To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.

Key points

Tax setting

Switzerland is not a member of the EU, so the tax rules are different than those applied by European Union member states. The New Cross-border Workers Agreement is in force from 1 January 2024 and provides a series of rules to regulate employment relationships between cross-border workers and their companies.

Switzerland has a different tax system than the EU, with a federal income tax of 8.2%, which may vary depending on the region of residence. Furthermore, there are cantonal and municipal taxes, which can reach 20% of income.

How the New Cross-Border Agreement works

The New Cross-Border Agreement was stipulated on 31 May 2022 and underwent some changes during ratification. Among the main new features is the possibility of requesting reinstatement into the Swiss pension system for cross-border workers who have paid contributions in Switzerland. This can be done by December 31, 2025.

To benefit from this agreement, cross-border workers must be insured for sickness and unemployment in their home state and have paid contributions in Switzerland for at least 12 months. Furthermore, they must be insured for their pension and have an annual income of at least CHF 75,000.

Concrete examples

Suppose that a cross-border worker residing in Lovero in Switzerland works in Grisons. In 2022, he paid contributions in Switzerland in the amount of CHF 18,000. If you decide to request reinstatement into the Swiss pension system, you will be able to benefit from an increase in pension contributions of 10% compared to that provided for by the Italian pension system.

Operational checklists

To benefit from the New Cross-border Agreement, cross-border workers must:

• Have paid contributions in Switzerland for at least 12 months
• Be insured for sickness and unemployment in their home state
• Have an annual income of at least 75,000 CHF
• Request reinstatement into the Swiss pension system by 31 December 2025

Comparisons between practical scenarios

Let's assume that a cross-border worker residing in Lovero in Switzerland works in Grisons and has paid contributions in Switzerland amounting to CHF 18,000 in 2022. If he decides to request reinstatement in the Swiss pension system, he will be able to benefit from an increase in pension contributions of 10% compared to what is foreseen by the Italian pension system.

In this scenario, the cross-border worker will be able to obtain a pension income of CHF 5,400 per year, whereas if he had not requested reinstatement, he would have obtained a pension income of CHF 4,860 per year.

Useful resources

For more information on the New Cross-Border Agreement and Swiss tax rules, we recommend consulting the website of the Federal Tax Administration (FTA) or contacting a specialized tax advisor.

For further information on the subject, we recommend consulting the following sources:

• Federal Tax Administration (FTA)
• Federal Council of Switzerland
• Swiss Bank
• Foundation for professional training in Switzerland

Check tax deadlines for cross-border workers: returns, Swiss declarations, rebates — all dates in one interactive calendar.