Living in Introd and working in Valais as a border worker

Context

In a nutshell

• Introd (AO) is far from the main centres of the Valais mountain car routes
• The Italian border crossing in Switzerland is taxed ONLY at source in Switzerland
• New Frontier Agreement in force from 1 January 2024 (signature 23/12/2020)
• Old cross-border workers remain taxed only in Switzerland (Art. 9 of the 2020 Agreement). new: deductible €10,000

Key facts

• What: transfer of an Italian resident to Introd (Valle d 'Aosta) who works as a border worker in the Canton of Valais
• When: ordinary regime in force from 1 January 2024
• Where: Introd (AO) → Valais (CH); Italian-Swiss border alpine passes
• Who: Employed worker with Permit G issued by the cantonal authorities of Valais
• Amount: deductible €10,000 for new frontier workers;
• Reference: Italy-Switzerland Double Taxation Convention of 9 March 1976
• IT ratification: Law 83 of 13 June 2023 (New Frontier Agreement)

Introd is a municipality of a few hundred inhabitants located in Valle d 'Aosta, upstream of Aosta, in the direction of Gran Paradiso. Those who reside in Introd and aim at the Valais job market must face an alpine commute different from the classic flows to the Canton of Ticino: no A2 or plain crossings, but tunnels and high altitude passes open with seasonality.

The Italian border worker working in Switzerland — including the Valais Canton — is taxed exclusively at source in the working canton.

Operational details

Costs and times: the commuting voice

Those who consider moving to Introd must take into account an alpine commuting different from the flows towards the Canton Ticino. The main employment poles of Valais — Martigny, Sion, Sierre, Monthey, Brig-Glis — are reached from Introd through the Gran San Bernardo Tunnel (T1) or the Simplon Tunnel, with travel times that depend on weather and traffic. The Gran San Bernardo Tunnel is the natural connection to Martigny, the gateway to Romandy Switzerland.

The cost of the toll for the Gran San Bernardo Tunnel and the consumption of a vehicle traveling alpine hairpin bends must be compared with the advantage of renting or buying a property in Introd, where the average rents are generally lower than in Aosta city or the urban centers of Valais. However, the cost of living remains a factor to be evaluated on a case-by-case basis: in Switzerland, the purchasing power differential in the paycheck is discounted, but food expenses and frequent consumer goods are purchased in Italy.

Paycheck: what is withheld

On the gross Swiss salary, the mandatory Swiss withholdings are applied, administered by AFC/ESTV at the federal level and by the cantonal administrations of contributions: AVS/AI/IPG 5.3% at the expense of the employee, AD/AC 1.1% (with a ceiling of CHF 148,200), LAINF between 0.7% and 1.5% according to the company risk, and LPP from 7% to 18% depending on the age group and coordinated salary, starting from 25 years. The withholding tax on employment income is withheld in Switzerland. The Canton of Valais refunds part of the tax revenue to the Swiss municipalities: these are the so-called refunds, an income item for the Canton of Valais and for the Swiss border municipalities. For the cross-border worker, nothing changes in the paycheck; it is a dynamic of local public finance.

Declaration in Italy

The Italian cross-border worker must file the income tax return in Italy, indicating the foreign income in the RC box or, for cross-border employees, in the dedicated sections. The tax credit for taxes paid abroad (Switzerland) is entered in the CE box of the 730 form and serves to avoid double taxation. Old cross-border workers remain taxed only in Switzerland (Art. 9 of the 2020 Agreement). 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. The new Agreement regime has applied since 1 January 2024.

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

Health and insurance aspects

The cross-border worker with Permit G working in Valais is subject to the obligation to insure against illness according to the LAMal, the Swiss federal health insurance, not a "health tax". The cross-border worker G has the right to choose: they can choose between Swiss insurance and enrollment in the Italian health system. The deductibles for adult insured persons range from CHF 300 to CHF 2,500. For care in the Aosta Valley, it is useful to check the coverage of Italian and Swiss supplementary insurances, as well as the existing cross-border agreements. For pensions, the worker is enrolled in the Swiss AHV (first pillar) and, if the employer applies the regulation, in the LPP (second pillar). The third pillar 3a remains an individual option, with tax advantages in Switzerland but to be evaluated in the context of returning to Italy.

What to do before moving to Introd

Before taking a house in Introd and signing the employment contract in Valais, it is advisable to check some operational aspects:

• Obtain the Swiss employment contract and start the procedure for Permit G with the Valais authorities
• Check the registration with the Municipality of Introd and the update of the Italian residence
• Request the Italian tax code and check the INPS position for the future pension
• Evaluate the health insurance according to LAMal and the right to choose
• Check the coverage of the car insurance for the transit on the alpine tunnels (Grand Saint-Bernard, Simplon)
• Keep the pay slips and salary certificates for the annual tax return

To simulate the impact on the net pay and calculate the applicable deductible, use the salary calculator. To compare the cost of living between the Aosta Valley and the Canton of Valais, the cost of living comparator provides an estimate for the household. To plan health insurance and LAMal premiums, consult the health insurance guide.

Timelines and deadlines

The tax return in Italy follows the ordinary deadlines of the 730 model (July for those who submit through CAF, October for the pre-filled 730). INPS requires the contributory position for the future pension: the Swiss AHV contributions are managed according to the social security agreement between Italy and Switzerland. For the first day of work in Valais, the first day checklist lists the essential documents.

Article 1(237–238) of Italian Law No. 213/2023 does not apply indiscriminately to all cross-border workers. It covers: (a) Italian residents who work and stay in Switzerland and use the Italian SSN; (b) frontier workers under Article 9(1) of the Italy–Switzerland Agreement whose income is taxable only in Switzerland and who exercised the legal right to choose health insurance; and (c) dependants of those two categories. Paragraph 238 sets a progressive 3–6% share of net Swiss salary, with a €30 minimum and an ordinary €200 maximum for each month worked from 2024. The cap may be doubled in cases of omitted payment or omitted communication specified in Article 1(100) of Law No. 207/2024. The Region of residence sets the rates and procedure each year.