Living in Prato Allo Stelvio and working in Grisons (cross-border guide)

Context

In a nutshell

• The New Frontier Agreement is in force from 1 January 2024
• Tax at source only in Switzerland, without double taxation
• Mandatory LAMal in Switzerland, deductible CHF 300–2500
• AVS contributions 5.3%, LPP 7–18% by age group

Key facts

• Agreement: New Italian-Swiss Border Agreement
• Effective: From 1 January 2024
• Taxation: Source tax in Switzerland
• Excess for old frontier workers: CHF 7,500
• Excess for new frontier workers: CHF 10,000
• LAMal: Franchise CHF 300–2500
• AVS: 5.3% employee contribution
• LPP: 7–18% by age group (from 25 years)

Those who work in Swiss Graubünden but reside in Italy benefit from the border regime defined by the New Frontier Agreement, in force since 1 January 2024. This agreement has redesigned the rules on taxation, work permits and social contributions for Italian border workers working in Switzerland.

The border regime for those who work in Graubünden

Switzerland applies the tax at source directly in the paycheck. Italy avoids double taxation: the EC 730 tax credit offsets what has already been paid in Switzerland. There is no risk of double taxation on employee income. The Double Taxation Convention between Italy and Switzerland, signed on 9 December 1976, ensures that income is taxed only in the country where the work is carried out.

Taxation and permits

The new border regime distinguishes between old and new border workers. Who

Operational details

Cost of living: Switzerland vs Italy

Those who live in Prato Allo Stelvio (Italy) and work in Graubünden (Switzerland) face a significant difference in the cost of living. In general, prices in Switzerland are 30-50% higher than in Italy: food, accommodation, transport, tariffs. However, Swiss salaries are proportionately higher, which partially compensates for expenses.

To evaluate the concrete convenience, it is necessary to compare the gross salary in Switzerland with the Swiss deductions (source tax, LAMal, AVS, LPP), which represent about 15-25% of the gross. Add to this the actual living expenses in Switzerland versus Italy. The CHF-EUR exchange rate greatly affects the final balance: a fluctuation of the Swiss currency against the euro changes the real purchasing power.

Commuting and connections

The Graubünden connect to Prato Allo Stelvio through a network of mountain roads. However, not all Grison municipalities are equidistant: depending on where the employer is located (municipalities such as Davos, Chur, Arosa have very different locations), the journey time can vary from 1-2 hours to 3-4 hours. It is crucial to check:

• The precise location of the employer in the Graubünden
• Access roads (crossings, winter and snowy conditions)
• Public transport available (Rhaetian Railway, bus)
• The cost of the Swiss vignette (CHF 40 per year) and petrol

Many border crossers choose to

Useful planning tools

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

Key points

Concrete Steps Before Moving to Prato Allo Stelvio and Working in Grisons

1. Verify Eligibility for the G Permit Check with the municipality of Prato Allo Stelvio or the province of Bolzano if the territory falls within the authorized border area for the G Permit. You will need a letter of employment from the employer in Grisons that confirms the occupation.

2. Open a Swiss Bank Account Many Swiss employers pay via international bank transfer. Open a current account with a Swiss bank or with Italian institutions that offer multi-currency CHF-EUR accounts. You will need your personal data, passport, and proof of Italian residence.

3. Register with the Swiss Health Insurance (LAMal) Once authorized to work, register with a Swiss health insurance company within 3 months (imposable deadline). You can choose from various companies. Compare the deductibles (CHF 300–2500) and coverage conditions.

4. Notify the Italian Revenue Agency Declare your frontier status to the Italian Revenue Agency and the INPS. You will need to fill out the 730 declaration with the CE form for the tax credit on dependent employment income.

Required Documents and Deadlines

G Permit Document: Required to work legally in Switzerland and reside in Italy. Contact the demographic services of the municipality of Prato Allo Stelvio or the province. Issuance time: 2-6 weeks.

730 Declaration: The declaration must be completed within the set terms (usually May of the following year). You can do it through a tax consultant, CAF, or the Revenue Agency portal.

Employer Communications: Ask the Swiss employer for documentation on gross salary, applied deductions, and advance taxes. Some provide a pre-filled communication similar to the Swiss Lohnausweis, which facilitates the Italian declaration.

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