Living in Ollomont and working in Valais as a border worker (cross-border guide)

Context

In a nutshell

• New Frontier Agreement in force from 1 January 2024.
• Exclusive taxation in Switzerland with tax credit in Italy.
• Tax exemption of 10,000 euros for new frontier workers.
• Transitional regime for old frontier workers active until 2033.

Key facts

• What: New Italy-Switzerland Tax Agreement
• When: Effective January 1, 2024
• Where: Italy-Switzerland border (Valais)
• Who: Federal Tax Administration (FTA)
• Amount: Deductible of 10,000 euros for new frontier workers

Commuting between Ollomont and the Valais is a lifestyle choice that requires a clear understanding of the dynamics introduced by the new tax agreement, ratified by Law 83 of 13 June 2023. Since 1 January 2024, the taxation system for those working in Switzerland has been significantly reformed, consolidating the principle of taxation at source in the Swiss territory. For border workers embarking on this journey, it is essential to distinguish between the position of workers active before 17 July 2023 and new hires. The 'old frontier workers' benefit from a transitional regime that will extend until 31 December 2033, guaranteeing a specific management of taxation. On the contrary, for new workers, the exemption of 10,000 euros applies, a threshold that defines the tax base for the calculation of taxes in Italy, avoiding in any case double taxation thanks to the mechanism of

Operational details

The practical analysis of the daily commute between Ollomont and the Valais must consider not only taxation, but also the Swiss pension and insurance system, which directly affects the pay slip. Every worker who serves in Switzerland is subject to mandatory withholdings that cover various social security benefits. In addition to the mentioned 5.3% AVS/AI/IPG quota, the employee contributes to unemployment insurance (AD/AC) with an 1.1% rate, calculated on an annual maximum income of 148,200 CHF. To these amounts are added premiums for non-professional accident insurance (LAINF), which vary between 0.7% and 1.5%, and contributions to professional pension insurance (LPP), which range from 7% to 18% depending on the worker's age group, with a mandatory payment obligation starting at 25 years.

Useful planning tools

To estimate your pension strategy, use the pension planner and the pillar 3 simulator.

Key points

For those living in Ollomont and commuting daily to the Valais, the operational procedure begins with the correct management of the work permit, specifically the G permit, which attests the status of a cross-border worker. Once employed, it is necessary to regularize one's position at the INPS and the Tax Agency regarding income tax declaration, remembering that the withholding tax occurs at the source in Switzerland. The documentation to be kept includes salary certificates issued by the Swiss employer, which are fundamental for correctly completing the CE table of the model 730 in Italy. It is advisable to maintain an organized archive of all pay slips and attestations of payment of social security contributions, including LPP and AVS, to facilitate operations and verify the tax credit due.

First day as a cross-border worker? Our practical guide walks you from cantonal registration to your first paycheck.