Living in Villeneuve and working in Valais: border guide

Context

In brief

• Villeneuve (Aosta Valley) is a strategic base for working in Valais (Switzerland)
• New Cross-Border Workers Agreement: in effect from January 1, 2024
• G permit for cross-border workers, mandatory LAMal in Switzerland
• Withholding tax deducted in Switzerland, tax credit in Italy

Key facts

• What: Cross-border worker residing in Villeneuve (Italy), employed in Valais (Switzerland)
• When: New Cross-Border Workers Agreement active from January 1, 2024
• Where: Villeneuve (Aosta Valley, Italy) ↔ Valais (Switzerland)
• Permit: G permit for cross-border workers; mandatory LAMal in Switzerland
• Taxes: Withholding tax in Switzerland; tax credit in Italy

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Villeneuve, a municipality in the Aosta Valley, represents a strategic choice for those who wish to work in Valais (Switzerland) while remaining resident in Italy. The geographical position of Villeneuve, close to the Valais border, allows for easy access to the main work centers in Swiss Valais while maintaining the Italian cost of living. Thousands of cross-border workers travel this route daily, benefiting from the tax and social security arrangements provided by the Italy-Switzerland bilateral agreements.

The New Cross-Border Workers Agreement: what changes from 2024

From January 1, 2024, the New Cross-Border Workers Agreement (signed on December 23, 2020, and ratified by Italy with Law 83 of June 13, 2023) regulates cross-border work conditions between Italy and Switzerland. 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.

This mechanism reduces the tax burden for those working in Switzerland and residing in Italy, balancing the tax rates and ensuring continuity in AVS/LPP benefits (old-age, survivors, and disability insurance for contributions; professional pension fund).

Withholding taxes and double taxation: how it works

The tax regime for the Villeneuve-Valais cross-border worker follows the principle of the Italy-Switzerland Convention on double taxation (signed on March 9, 1976): the withholding tax is deducted in Switzerland by the employer. Italy avoids double taxation through the tax credit in the CE section of the income tax return (model 730).

There are no simultaneous deductions in both countries: Switzerland applies the tax directly; Italy recognizes the credit for the Swiss tax paid, calculated based on the Convention.

G permit: what is needed to work

Those residing in Villeneuve and intending to work in Valais must hold a G permit (work permit for cross-border workers), issued by the competent Swiss cantonal office. The G permit allows for employment as a subordinate with a Swiss employer, directly in Valais, respecting the terms of the Italy-Switzerland Convention. The permit is valid for one year and is renewable, provided the employment relationship continues.

Operational details

Living in Villeneuve: cost of living and practical considerations

Villeneuve offers a lower cost of living than Swiss centres, allowing frontier workers to maximise their gross savings. However, commuting involves fuel costs, car maintenance, vehicle insurance, and potentially tolls on highways if the route includes them. These elements must be calculated in the overall balance sheet with respect to a Swiss salary.

Quality of life in Villeneuve includes access to Italian services (healthcare, school, entertainment) at lower prices than in Switzerland, a significant advantage for families with children or elderly dependants. At the same time, it is necessary to check the specific distances from the main employers in Valais and plan travel times according to seasonal conditions.

Social protection: AVS, LPP and LAMal as border crossers

A critical aspect of the choice to live in Villeneuve and work in Valais concerns social and social security protection.

AVS (Old Age, Survivors and Disability Insurance): As an employed border worker in Switzerland, you automatically pay AVS contributions at 5.3% of salary (as an employee). These contributions accumulate towards a life annuity from the legal retirement age.

LPP (Occupational Pension): The Swiss employer enrolls the border worker in an occupational pension fund (LPP). I

Useful planning tools

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

Key points

Procedure to become a commuter Villeneuve-Valais: step-by-step

Step 1 – Obtain a job offer in Valais First, secure a binding job offer from a Swiss employer operating in Valais. The offer must specify the role, annual salary, and start date. Many Swiss employers are familiar with the G Permit process and assist Italian candidates in completing the applications.

Step 2 – Apply for the G Permit With the job offer in hand, approach the competent cantonal office in Valais to submit the G Permit application. You will need to provide a valid Italian passport, a signed job offer, a residence certificate from Villeneuve (Italian registry), and possibly previous tax declarations. Processing times range from 2 to 4 weeks. The G permit is valid for five years with a contract of more than one year; with a shorter contract it lasts as long as the contract.

Step 3 – Register with AVS/LPP through the Swiss employer The employer automatically registers the commuter with the AVS and LPP schemes. You will receive an AVS number to keep for your entire career. It is essential to verify that contributions are regularly recorded by checking the AVS statement at a compensation office or online.

Step 4 – Choose health insurance (LAMal or INPS) Decide whether to join a Swiss health insurance fund (LAMal) or maintain INPS Italian insurance thanks to the right of option. If you choose LAMal, contact a Valais health insurance fund and present the G Permit, identity document, and residence. If you opt for Italian INPS, ensure your registration is up-to-date and that Swiss work periods are recognized as contributions through the Italy-Switzerland Convention.

Step 5 – Register with the Italian Tax Agency Even though you work in Switzerland, you remain a tax resident in Italy. By May 31 each year, you must file your tax return (model 730 or Unico). In the CE section, report the tax paid in Switzerland to obtain the tax credit. Many commuters use specialized accountants to avoid filing errors.

Deadlines and documents to verify each year

Tools and resources available to commuters

Use the salary calculator to estimate your net monthly income considering AVS/LPP deductions, Swiss withholding tax, and expected refund in Italy. This helps you plan your family budget realistically, integrating commuting costs.

For specific doubts about taxation and refunds, consult the refund comparator dedicated to Italy-Switzerland commuters. Finally, check the cost of living as a comparative reference between Italy and Switzerland, useful for evaluating the overall convenience of moving to Villeneuve with a job in Valais.