Living in Trasquera and working in Ticino as a border worker

Context

Brief Overview

• New fiscal agreement in effect from January 1, 2024.
• Source taxation applied in Switzerland (for new cross-border workers also in Italy, with a tax credit).
• Italian tax credit avoids double taxation.
• Old cross-border workers remain taxed only in Switzerland (Art. 9 of the 2020 Agreement).

Key Facts

• What: Agreement for border workers
• When: In effect from January 1, 2024
• Where: Canton Ticino and Italy
• Who: Federal Administration of Contributions (AFC)
• For Article 9 of the Agreement, “old frontier workers” are people who met the tax requirements and worked in Graubünden, Ticino or Valais on 17 July 2023 or during the period from 31 December 2018 through 17 July 2023. Article 9 keeps covered employment income taxable exclusively at source in Switzerland; other workers follow the ordinary regime, with ordinary taxation in Italy, a credit for Swiss tax and Swiss withholding at 80% of the ordinary rates. The €10,000 figure in Article 4 of Italian Law No. 83/2023 is only the income limit referred to in Article 1(175) of Law No. 147/2013; it is not a general allowance for new frontier workers. Sources: ESTV factsheet (Italian) · Agreement, Art. 9 · Law No. 83/2023, Art. 4.

The commuting between Trasquera and the Canton Ticino is regulated by the New Border Workers Agreement, signed on December 23, 2020 and fully operational from January 1, 2024, following the Italian ratification through Law 83 of June 13, 2023. This regulatory framework defines the modalities with which the worker who resides in Italy and works in Switzerland fulfills their tax obligations. The taxation takes place at the source, with withholdings carried out directly in Switzerland, excluding simultaneous withholding in both countries. To avoid double taxation, Italy recognizes a tax credit, which must be indicated in the CE section of the model 730. The €10,000 limit is not a general allowance: Article 4 of Italian Law No. 83/2023 applies it only to the income referred to in Article 1(175) of Law No. 147/2013. Switzerland, although not a member of the EU or EEA, maintains a convention against double taxation signed on March 9, 1976. The Federal Administration of Contributions (AFC) oversees the tax rates, while the Federal Statistical Office (BFS) is responsible for monitoring the statistical flows of traffic. It is essential to distinguish between the competences of the entities: the tax rates and contributions, such as AVS/AI/IPG at 5.3% for the employee, are defined by federal and cantonal norms, not by the social security entities. For those planning the daily route, the monitoring of border crossings and traffic flows remains a crucial element of commuting waiting times.

Operational details

The analysis of the cost of living and social security charges requires a clear understanding of the contributions paid on the Swiss paycheck. In addition to the tax at source, the worker is subject to mandatory deductions: unemployment insurance (AD/AC) is 1.1% up to a ceiling of CHF 148,200, while the LAINF ranges from 0.7% to 1.5%. From 25 years of age, payments for the second pillar (LPP) are added, with rates varying between 7% and 18% depending on the age group. Compared to the previous legislation, the new agreement introduced greater clarity in the management of the tax credit. For the calculation of net income, it is necessary to consider that the Italian personal income tax rates applicable to total income, once the deductible is deducted, are progressive: 23% up to 28,000 euros, 33% for the 28,001-50,000 euro range and 43% over 50,000 euros. The comparison between the pre-2024 situation and the current one shows how the management of the calcolatore stipendio has become an obligatory step for every worker. Despite regulatory changes, the key principle remains the neutralisation of double taxation. The hypothetical scenarios indicate that for a worker with average income, the correct application of the tax credit allows to maintain a balanced spending capacity between the cost of living in Trasquera and Swiss salaries. It is advisable to constantly monitor the communications of the Agency of

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

The operational management of one's frontier position requires a precise checklist to avoid errors in the declaration of income. The first step is the correct compilation of the 730 model, inserting the data related to the income received in Switzerland in the CE box to request the tax credit. The €10,000 limit is not a general allowance: Article 4 of Italian Law No. 83/2023 applies it only to the income referred to in Article 1(175) of Law No. 147/2013. It is recommended to always keep up-to-date the documentation related to the contributions paid, including AVS and LPP, to compare them with the annual certifications issued by the Swiss employer. The procedure for paying the withholding tax is automated by the employer, who deducts the amount due directly from the gross salary before paying it to the employee. Regarding social security, the second pillar (LPP) represents a mandatory savings form that, in certain conditions, can be managed or redeemed. It is highly recommended to use online tools to simulate one's monthly net income, taking into account the current pre- and post-tax deductions. For those who need a comprehensive view of their purchasing power, the cost of living in Ticino compared to the Italian place of residence can be analyzed through dedicated comparators. In case of doubts about one's fiscal position, consulting the circulars of the Italian Revenue Agency remains the safest way. We remind you that changes in Italian IRPEF tax rates directly affect the calculation of the tax credit; therefore, an annual review of one's situation is essential to optimize the overall tax burden. For a detailed analysis of one's monthly net salary, we invite you to use the salary calculator.