Moving to Bizzarone from border crossings: pros and cons (cross-border guide)

Context

In a nutshell

• The Italy-Switzerland double taxation agreement exists. - Switzerland is not an EU/EEA member. - The New Frontier Agreement was signed on 23 December 2020. - The Italian ratification took place with Law 83 of 13 June 2023. - The transitional regime for old frontier workers has been established for the period 2024-2033. - The deductible for new frontier workers has been set at CHF 10,000. - The New Frontier Agreement provides for an exemption of CHF 7,500 for old frontier workers and a deductible of CHF 10,000 for new frontier workers.

Key facts

• The New Frontier Agreement was signed on 23 December 2020. - The Italian ratification took place with Law 83 of 13 June 2023. - The transitional regime for old frontier workers has been established for the period 2024-2033. - The deductible for new frontier workers has been set at CHF 10,000. - The New Frontier Agreement provides for an exemption of CHF 7,500 for old frontier workers and a deductible of CHF 10,000 for new frontier workers. - The Municipality of Bizzarone, located in the Canton of Ticino, is a place of interest for border crossers who wish to move to Switzerland. - The cost of living in Bizzarone is slightly lower than in other locations in the Canton of Ticino.

What you need to know before moving to Bizzarone as a border worker

• Access to health services : if you are an Italian citizen residing in Switzerland, you will have access to Swiss health services, but you may have to pay for the

Operational details

Implications for frontier workers

Border workers wishing to move to Bizzarone, a municipality in the Canton of Ticino, will need to carefully consider the tax and bureaucratic implications associated with this type of transfer. In particular, border workers will have to take into account the Italian and Swiss tax settings, as well as the Italy-Switzerland double taxation convention, which provides for the exemption for border workers.

The Italy-Switzerland double taxation convention was signed on 19 June 1963 and entered into force on 1 January 1964. Under the convention, frontier earners' incomes are exempt from taxation in both countries. However, frontier workers will have to file tax returns in Italy and Switzerland, as required by local regulations.

Procedures

The presentation of the tax return in Italy and Switzerland is mandatory for border workers. Border workers must submit their tax return by 30 April of the year following the year in which they received the income.

Here are some concrete examples:

• A border worker who receives an income of CHF 50,000 per year must file a tax return in Switzerland by 30 April of the following year. * A border worker who receives an income of 30,000 euros per year must file a tax return in Italy by 30 April of the following year.

Operational Checklists

Here is an operational checklist

Useful tools to protect your net income

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

Key points

What to do - Border workers will need to consult a lawyer to understand their tax responsibilities and any choices to be made based on their income profile and financial resources. - Border workers must submit their tax return in Italy and Switzerland within the established deadline, taking into account the tax regulations in force, such as the Swiss tax law of 2018 and the Italian tax law of 2019. - Border workers will have to consider the Italian and Swiss tax settings to avoid incurring tax problems, such as double taxation of income, and opt for the most advantageous options, such as choosing to be considered residents of only one State. - In addition, frontier workers will have to consider the rules relating to the taxation of employment income, such as the taxation of employment income in Switzerland, which provides for a rate of 30% for employment income. - Here is a concrete example: if a border worker has an income of CHF 80,000 per year and chooses to be considered resident in Switzerland, he will have to pay a tax of CHF 24,000 (30% of CHF 80,000), while if he chooses to be considered resident in Italy, he will have to pay a tax of CHF 24,000 (30% of CHF 80,000) plus Italian taxes, which could be 0.2% of income. - In addition, frontier workers will have to consider the rules relating to the taxation of income from - Do not neglect the submission of the tax return in Italy and Switzerland within the established deadline - Do not neglect the consideration of the Italian and Swiss tax settings to avoid tax problems - Do not neglect the choice of residence in only one State to avoid double taxation of income - Do not neglect the consideration of the rules relating to the taxation of income from work - Do not neglect the choice of residence in Switzerland to pay a tax of 30% of employee income