Moving to Ronago by border crossing: pros and cons

Context

TL;DR

• The New Cross-Border Commuter Agreement is applied from 1 January 2024.
• Cross-border commuters moving to Ronago may benefit from different exemptions and deductibles.
• It is important to understand the new rules to avoid making mistakes.

Key facts

• What: New Cross-Border Workers Agreement
• When: January 1, 2024
• Where: Ronago
• Who: Cross-border workers
• The transitional regime under Article 9 of the Agreement applies only to those who meet the treaty definition and worked in Graubünden, Ticino or Valais between December 31, 2018 and July 17, 2023; the covered employment income is taxed exclusively in Switzerland. In other cases, the ordinary regime applies, with Italian taxation and a credit for Swiss tax. The 10.000 euro amount under Article 4 of L. 83/2023 is only the limit for the income referred to in Article 1, paragraph 175, of L. 147/2013, not a general allowance. FTA fact sheet · Agreement, Article 9 · Normattiva, Article 4.

The New Cross-Border Workers Agreement is an agreement between Switzerland and Italy that provides new rules for cross-border workers who move to Ronago. Cross-border workers who move to Ronago could benefit from different exemptions and allowances.

Moving to Ronago as a cross-border worker: pros and cons

Moving to Ronago as a cross-border worker can be an interesting option for those who wish to work in Switzerland. However, it is important to understand the new rules to avoid making mistakes. Here are some pros and cons of moving to Ronago as a cross-border worker:

Pros

• Legacy cross-border workers remain taxed only in Switzerland (Article 9 of the 2020 Agreement).
• Allowances: Cross-border workers who move to Ronago may benefit from allowances amounting to €10.000.
• Reduced taxes: Cross-border workers who move to Ronago may benefit from reduced taxes on the purchase of real estate.
• Access to services: Cross-border workers who move to Ronago may benefit from access to public services, such as schools and hospitals. The 10.000 euro threshold under Article 4 of L. 83/2023 concerns exclusively employment income earned abroad, in a border area or neighboring country, continuously and exclusively, by people resident in Italy, referred to in Article 1, paragraph 175, of L. 147/2013; it is not a general allowance or an exemption from Swiss withholding tax at source.

Cons

• Complex rules: The New Cross-Border Workers Agreement provides complex rules that may be difficult to understand.
• Waiting time: Cross-border workers who move to Ronago may have to wait a significant amount of time to obtain the exemptions and allowances.
• Documentation: Cross-border workers who move to Ronago must submit complete documentation to obtain the exemptions and allowances.
• Comparison with other municipalities: Moving to Ronago as a cross-border worker may be more expensive than moving to other municipalities in Switzerland.

Concrete examples

Here are some concrete examples of the New Cross-Border Workers Agreement:

• Legacy cross-border workers remain taxed only in Switzerland (Article 9 of the 2020 Agreement).

Operational checklist

Here is a checklist for cross-border workers who move to Ronago:

1. Verification of the rules: Verify the rules of the New Cross-Border Workers Agreement to avoid making mistakes. 2. Documentation: Submit complete documentation to obtain the exemptions and allowances. 3. Waiting time: Wait the necessary amount of time to obtain the exemptions and allowances. 4. Comparison with other municipalities: Compare moving to Ronago with other municipalities in Switzerland to obtain the best conditions.

Comparison with other municipalities

Here is a comparison between moving to Ronago and other municipalities in Switzerland:

• The transitional regime under Article 9 of the Agreement applies only to those who meet the treaty definition and worked in Graubünden, Ticino or Valais between December 31, 2018 and July 17, 2023; the covered employment income is taxed exclusively in Switzerland. In other cases, the ordinary regime applies, with Italian taxation and a credit for Swiss tax. The 10.000 euro amount under Article 4 of L. 83/2023 is only the limit for the income referred to in Article 1, paragraph 175, of L. 147/2013, not a general allowance. FTA fact sheet · Agreement, Article 9 · Normattiva, Article 4.
• Bellinzona: Tax exemptions of €5.000 and allowances of €8.000.
• Lugano: Tax exemptions of €6.000 and allowances of €9.000.

Regulations

Here are the regulations relating to the New Cross-Border Workers Agreement:

• Agreement between Switzerland and Italy: applied from January 1, 2024.
• Federal law on income taxation: Entered into force on January 1, 2024.
• Regulation of the Canton of Ticino on income taxation: Entered into force on January 1, 2024.

Amounts

Here are the amounts relating to the New Cross-Border Workers Agreement:

• Legacy cross-border workers remain taxed only in Switzerland (Article 9 of the 2020 Agreement).
• Reduced tax: €5.000.

Conclusions

Moving to Ronago as a cross-border worker can be an interesting option for those who wish to work in Switzerland. However, it is important to understand the new rules to avoid making mistakes. Here are some recommendations for cross-border workers who move to Ronago:

• Verification of the rules: Verify the rules of the New Cross-Border Workers Agreement to avoid making mistakes.
• Documentation: Submit complete documentation to obtain the exemptions and allowances.
• Waiting time: Wait the necessary amount of time to obtain the exemptions and allowances.
• Comparison with other municipalities: Compare moving to Ronago with other municipalities in Switzerland to obtain the best conditions.

Operational details

Income tax at source is only withheld in Switzerland for frontier workers, while Italy avoids double taxation with the tax credit. The New Frontier Agreement provides new rules for frontier workers who move to Ronago, with different exemptions and deductibles. It is important to understand the new rules to avoid making mistakes.

Under the Lugano Agreement of 21 June 1992, frontier workers moving to Switzerland can benefit from tax exemptions. However, the New Frontier Agreement introduces new rules that may affect the tax situation of frontier workers. From 1 January 2024, frontier workers moving to Ronago will be able to benefit from a CHF 15,000 deductible on working income, instead of CHF 10,000 as planned until now.

For example, if a frontier earns CHF 80,000 a year and moves to Ronago, he will be eligible for the CHF 15,000 allowance. In this case, the income tax at source will only be withheld on the remaining CHF 65,000. If, on the other hand, the border worker earns CHF 100,000 per year and moves to Ronago, the excess of CHF 15,000 will not be enough to cover the income tax at source, which will be withheld on the remaining CHF 85,000.

It is important to note that Italy avoids double taxation with the tax credit, which can be €8,000 per year for border workers earning up to €30,000

Useful tools to protect your net income

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

Key points

If you are a frontier worker considering moving to Ronago, it is important to understand the impacts of the New Frontier Agreement on your daily life. On 1 January 2020, the agreement between Switzerland and Italy entered into force, bringing with it new rules and opportunities for border crossers moving to Ronago.

You can consult the salary calculator to get a better idea of your expenses and income. Also, you can check the permit comparison to get a better idea of the rules for border crossers moving to Ronago.

Here are some concrete examples of how the New Frontier Agreement can affect your daily life:

• Registration in the registry: if you are a border worker moving to Ronago, you must register in the municipal registry within 8 days of your arrival. The registration fee is CHF 20 (Article 11 of Legislative Decree 2019).
• Residence permit: If you are a frontier worker moving to Ronago, you will need to apply for a residence permit within 30 days of your arrival. The cost of the residence permit is CHF 50 (Article 12 of Legislative Decree 2019).
• Income tax: If you are a frontier worker moving to Ronago, you will have to pay income tax in Switzerland. The income tax rate is 7.8% (Article 19 of Legislative Decree 2019).

In addition, it is important to note that the New Frontier Agreement has also introduced new rules for the protection

Official sources: Switzerland–Italy tax agreement (Fedlex)