Living in Orsenigo and working in Ticino as a border worker: what changes? (cross-border guide)

Context

Key facts

• New tax agreement for frontier workers
• Signed on 23 December 2020
• Entered into force on 1 January 2024
• What changes for Orsenigo residents?

Introduction

On 23 December 2020, the Swiss Government and the Italian Government signed a new tax agreement concerning border workers working in Ticino. This agreement entered into force on 1 January 2024 and makes significant changes to the tax rules for residents of Orsenigo and other border municipalities.

What changes for Orsenigo residents?

With the entry into force of the new tax agreement, residents of Orsenigo and other border municipalities will only have to return to work in Switzerland if they have an annual income of more than CHF 15,000. This means that for incomes below this threshold, frontier workers will no longer have to file a tax return in Switzerland.

Concrete example

Let's imagine that we have a border worker living in Orsenigo who earns 12,000CHF a year working in a company in Lugano. Previously, you would have had to file your tax return in Switzerland, but now, thanks to the new tax agreement, it will no longer be necessary.

Operational Checklists

For border workers residing in Orsenigo and other border municipalities, it is important to check whether they are subject to the new tax rules. Here's a checklist to help you understand what's changing:

• Do I have an annual income of less than CHF 15,000? No, then I have to present

Operational details

Border workers who already have an income from work in Switzerland, will have to pay the AVS (Swiss social insurance), but not the health tax. The health tax is a tax that is paid by Italians working in Switzerland who are not subject to AVS.

Swiss law states that foreigners working in Switzerland, but residing abroad, are subject to AVS. This means that frontier workers who already have a working income in Switzerland will have to pay the AVS, but not the health tax.

The health tax is a tax that is paid by Italians working in Switzerland who are not subject to AVS. This tax was introduced to cover healthcare costs for Italian citizens working in Switzerland who do not have access to AVS.

Concrete example: if a frontier worker has a working income of 50,000 Swiss francs per year and resides in Orsenigo, he will have to pay the AVS of about 3,500 Swiss francs per year, but not the health tax of about 1,500 Swiss francs per year.

Regulations: Swiss law stipulates that foreigners working in Switzerland, but residing abroad, are subject to the AVS (law of 1 January 2020). The health tax was introduced with the law of 1 January 2015.

Operational checklists:

• Check if you are subject to HSV
• Check if you are subject to the health tax
• Calculate the amount of the AVS and health tax
• Pay the AVS and health tax if

Useful planning tools

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

Key points

For border workers living in Orsenigo and working in Ticino, it is important to know that the new tax agreement provides for a number of changes. Border crossers will benefit from a deductible of CHF 10,000, but they will have to pay the AVS. It is also important to know that the health tax will no longer be paid.

On 1 January 2023, the tax agreement between Switzerland and the Czech Republic entered into force, introducing a number of novelties for border workers living in Switzerland and working in Ticino. Among the most important novelties, there is the CHF 10,000 deductible, which allows border workers not to pay income taxes up to this amount. However, it is important to note that frontier workers will still have to pay the AVS (Swiss social insurance) and health contribution.

A concrete example can help you better understand the situation. Suppose a frontier worker lives in Orsenigo and works in Lugano. If your income is CHF 40,000, you will be eligible for the CHF10,000 deductible and will not pay income tax up to this amount. However, you will still have to pay the AVS of CHF 2,400 (0.6% of income) and the health contribution of CHF1,200 (0.3% of income).

The health tax, which had been applied to border workers until 2022, will no longer be paid from 2023. This means that border crossers will no longer have to pay an additional health tax, which had been applied based on income.

Here's a

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