Living in Schignano and working in Ticino: a practical guide (cross-border guide)

Context

In a nutshell

• Tax at source withheld only in Switzerland; no double taxation with Italian tax credit
• From 1 January 2024: New active Agreement; deductible € 10,000 (new frontier workers)
• AVS/AI/IPG 5.3%, LPP 7-18%, LAMal mandatory with option right
• G-permit valid for 5 years, renewable by the cantonal authority Ticino

Key facts

• What: G Permit Frontier, Schignano-Ticino
• When: From 1 January 2024 (New Agreement in force)
• Where: Lombardy → Canton Ticino
• Who: Employee, INPS + AVS
• Tax: Withholding only in CH; IT personal income tax 23-43% (with credit for CH taxes)
• CH contributions: AVS/AI/IPG 5.3%, LPP 7-18%, LAINF 0.7-1.5%
• Permit: G (border), 5 years renewable

The border worker who lives in Schignano, Lombardy, and works in Ticino falls under the regime of cross-border workers regulated by the Italian-Swiss Convention of 9 December 1976 and the New Frontier Agreement (signed on 23 December 2020, in force from 1 January 2024). This status has tax, social security and organisational implications that differ significantly from the pure Italian employee or Swiss resident.

Taxation of the Schignano-Ticino border crossing

Income tax at source is only withheld in Switzerland. The frontier worker does not pay double taxation: Italy avoids the double burden by resorting to the tax credit in the EC Framework form of the tax return (730).

Operational details

Social security contributions and compulsory insurance

The border crossing paid in Ticino adheres to the Swiss social security system. The AVS (old-age disability pension), AI (disability insurance) and IPG (loss of earnings allowance) are retained to the extent of 5.3% on the gross salary for the employee; the company pays the additional 5.3% on behalf of the worker. In addition there are unemployment insurance contributions (AD/AC) of 1.1%, limited to a ceiling of CHF 148,200 per annum, and accident insurance (LAINF) between 0.7 and 1.5%. To these is added occupational pension insurance (LPP), the second Swiss pillar, which represents a share between 7 and 18% of the gross salary depending on the age group (from 25 years). While AVS/AI/IPG are mandatory by law, the LPP is conditional on registration with the company's pension fund.

At the same time, the border worker remains registered with the Italian INPS for the payment of Italian social security contributions (about 9-10% of the declared income), with which he accumulates pension rights in the Italian system. This double contribution is lawful and does not generate conflict: each country recognizes the contribution paid in the other in the event of progress towards retirement.

LAMal's choice: right of option and rewards

Health insurance (LAMal) in Switzerland is mandatory by law. Group G border workers have the right of option:

Useful planning tools

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

Key points

Procedure: How to become a Schignano–Ticino cross-border commuter

The administrative path involves three main steps. First: G Permit application. The cantonal Migration offices (SEM) or the cantonal police authority where the work will take place (Ticino) must be contacted. The application must be submitted jointly by the Swiss employer and the future employee. Required documents include: a valid passport or ID card, certificate of good conduct, employment contract, and documentation of the employer's registration with the Companies Register. The G Permit has long-term validity (generally 5 years, renewable) and allows daily commuting from the place of residence in Italy to the workplace in Ticino.

Second: simultaneous INPS registration. Once employed in Ticino, the worker must register with the Italian INPS as a salaried employee, reporting the expected gross Swiss income and the job category. This creates the Italian social security file alongside the Swiss AVS. The Swiss employer usually assists in transmitting social security data to the Italian authorities (CE coordination forms). Third: LAMal choice. Within the deadlines set by the employer (usually 3 months from hiring), the cross-border commuter declares whether to remain covered by the Italian CMI or to opt for a Swiss LAMal. The choice is not binding in perpetuity, but changing coverage requires notification to the employer and the relevant funds.

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