Living in Sondrio and working in Graubünden as a border worker (cross-border guide)

Context

In a nutshell

• Transfer to Sondrio and work in Switzerland in the Graubünden.
• Withholding tax withheld in Switzerland for frontier workers.
• Tax credit in Italy to avoid double taxation.
• Reference to the New Frontier Agreement and the rules in force.

Key facts

• What: Cross-border work between Sondrio and Grisons
• When: Rules in force from 1 January 2024
• Where: Province of Sondrio and Canton of Graubünden
• Who: Border workers and competent administrations
• Amount: Deductible of 10,000 euros for new frontier workers

Commuting between Italy and Switzerland is a daily choice for many workers who reside in the province of Sondrio and serve in the nearby Canton of Graubünden. This housing and work option requires careful assessment of road and rail connections, such as the Bernina line, customs travel times and the management of tax and social security aspects provided for by current regulations. Daily commutes involve the need to plan transits and gain in-depth knowledge of the structure of the Swiss labour market. For residents in border municipalities such as Tirano or Brusio, the new bilateral agreement that entered into force on 1 January 2024 redefines taxation: the Swiss source tax is withheld by the Swiss employer, while Italy recognises a tax credit to avoid double taxation, applying the

Operational details

Tax and social security aspects for workers in Sondrio

 ### Withholding tax and tax credit
 The tax regime applied to cross-border workers provides for withholding tax on earned income to be directly withheld in Switzerland. To avoid double taxation, Italian law recognizes a specific tax credit through the CE section of the 730 form, coordinating the Swiss levy with the national tax system. The Federal Tax Administration and the competent tax authorities manage the application of the rates established by federal and cantonal laws. The New Cross-border Workers Agreement, signed on December 23, 2020, and entered into force on January 1, 2024 following Italian ratification with Law 83 of June 13, 2023, introduced new provisions distinguishing between old and new cross-border workers. For old cross-border workers, i.e., those who were already cross-border workers before July 17, 2023, there is an exemption of €7,500 and a transitional regime covering the period 2024–2033. For new cross-border commuters, the tax exemption is set at €10,000. A worker residing in Sondrio and employed in Poschiavo with an annual income of CHF60,000 will have the tax withheld at source according to the cantonal tables. They can then deduct the tax paid in Switzerland directly from their Italian tax return thanks to the tax credit mechanism.

 Social security contributions and benefits in Switzerland
 On the

Useful tools to protect your net income

To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.

Key points

Transfer organization and practical management

Route planning and tax deadlines

Before proceeding with the transfer of the residence to Sondrio or to a neighbouring municipality of Valtellina to undertake a work activity in the Graubünden, it is advisable to analyse the costs of managing daily life and the sustainability of travel to border centres such as Poschiavo or Bregaglia. The new tax convention between Italy and Switzerland, which entered into force on 1 January 2024, constitutes the legal framework of reference in bilateral relations, taking into account that Switzerland is not part of the European Union. Workers must carefully monitor the deadlines of 30 November for the electronic submission of the tax return in Italy through the PF Income form and the correct management of the currency exchange between the Swiss franc and the euro, considering an initial exemption allowance of 10,000 euros per year for new frontier workers.

Useful tools and salary simulation

To face the cross-border work path without surprises, it is essential to use simulation and economic verification tools. It is possible to analyze the impact of social security deductions and plan your family budget through the calcolatore fiscale, verifying in a timely manner the items of the Swiss paycheck, which often provides for an initial gross salary of about 4,500 Swiss francs for employees