Living in Besano as a border worker: a guide for pros and cons

Context

In brief

• Strategic location close to the border crossings with Canton Ticino.
• New Cross-border Workers Agreement in force since January 1, 2024.
• Withholding tax applied in Switzerland.
• Tax credit to avoid double taxation in Italy.

Key facts

• What: Relocation and residency in the municipality of Besano for cross-border workers.
• When: Under the regime of the New Cross-border Workers Agreement in force since January 1, 2024.
• Where: Besano, in the province of Varese, close to the Swiss border.
• Who: Employees working in Canton Ticino.
• 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.

Analysis of the location and border connections

Moving to Besano is a common choice for many workers who cross the border every day to reach their jobs in Canton Ticino. The geographical position of the area offers a direct connection to customs and the main roads leading to major Ticino centers, such as Mendrisio and Lugano. This geographical proximity affects daily travel times, a decisive factor for those managing cross-border commuting. Evaluating the logistical context requires considering local traffic, especially during peak hours along the routes leading to the busiest customs crossings. Those who choose this location must deal with road transport management and the planning of departure times to optimize the home-work commute. The analysis of road connections highlights how proximity to the border represents an element of flexibility, although subordinate to the conditions of commuter traffic between Italy and Switzerland. To delve deeper into the overall economic impact on your family budget, you can use the online calculation tools available via the net salary calculator to accurately estimate your actual take-home pay net of tax and social security deductions applied across the border.

Operational details

Tax and social security aspects for residents of Besano

The regulatory framework of reference for those who reside in Besano and work in Switzerland is governed by the New Frontier Agreement, signed on 23 December 2020 and entered into force on 1 January 2024, with Italian ratification taking place through Law 83 of 13 June 2023. With regard to the taxation of income from work, the tax at source is withheld in Switzerland, while Italy eliminates double taxation through the tax credit mechanism included in the EC framework of model 730. For old border workers, i.e. Old cross-border workers remain taxed only in Switzerland (Art. 9 of the 2020 Agreement). 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. With regard to Swiss social security contributions, the mandatory deductions include the AVS/AI/IPG at 5.3% borne by the employee, the AD/AC unemployment insurance at 1.1% up to the maximum of 148,200 Swiss francs, the LAINF accident coverage between 0.7% and 1.5%, and the LPP contributions for the second pillar that vary from 7% to 18% based on the age group from 25 years. Tax rates and taxes at source are established by federal and cantonal laws and administered by the Federal Administration of AFC/ESTV Contributions at the federal level and by the administrations

Useful planning tools

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

Key points

Practical assessment and operational steps for the transfer

Dealing with the relocation to Besano requires a detailed planning of the administrative and bureaucratic procedures necessary to regularize your position as a cross-border worker. It is essential to verify the correct management of your tax residence in Italy and compliance with the provisions of the Revenue Agency and the Ministry of Economy and Finance MEF, taking into account the indications provided by entities such as INPS and the Secretariat of State for Migration SEM. Before proceeding with the change of residence, it is necessary to analyze the incidence of the local cost of living with respect to the salaries received in Swiss francs, assessing the trend of the currency exchange and the impact of the Italian personal income tax rates, which provide for brackets of 23% up to 28,000 euros, 33% between 28,001 and 50,000 euros and 43% for incomes above 50,000 euros. Those who move to Besano must also consider the logistics for the daily journey to work in Canton Ticino, checking the transit times at customs crossings and the sustainable or private mobility options available. For accurate financial planning and to assess the impact of tax and social security withholdings on the Swiss payroll, it is useful to use dedicated tools such as the calcolatore stipendio netto to optimize the management of your economic resources.