Moving to Trasquera from a border crossing: pros and cons

Context

In a nutshell

• The New Frontier Agreement was signed on 23 December 2020 and enters into force on 1 January 2024.
• The €10,000 threshold in Article 4 of Italian Law No. 83/2023 applies exclusively to employment income earned continuously and exclusively by Italian residents in a foreign border area or neighbouring country, as referred to in Article 1(175) of Law No. 147/2013; it is neither a general allowance nor an exemption from Swiss withholding tax.
• The Article 9 transitional regime applies only to workers who meet the Agreement’s definition and worked in Graubünden, Ticino or Valais between 31 December 2018 and 17 July 2023; covered employment income is taxable exclusively in Switzerland. The ordinary regime applies in other cases, with Italian taxation and credit for Swiss tax where applicable. The €10,000 in Article 4 of Law 83/2023 is only the income limit referred to in Article 1(175) of Law 147/2013, not a general allowance. FTA factsheet · Agreement, Article 9 · Normattiva, Article 4.
• The Italy-Switzerland Double Taxation Convention was signed on 9 March 1976.
• Switzerland is not a member of the EU/EEA.

Moving to Trasquera from a border crossing: pros and cons

For Italian citizens who intend to move to Trasquera, a municipality in the Canton of Ticino, Switzerland, with border status, it is important to understand the pros and cons of this choice.

I Pro

• Free movement: border workers will be able to move freely between Italy and Switzerland, without having to comply with the rules of residence.
• Access to services: Border workers will be able to access Swiss services, such as health and education, without having to pay accommodation fees.

I against

• Complex tax rules : Tax rules for frontier workers are complex and can be difficult to understand.
• Income threshold : Border workers must meet the income threshold established by the agreement, otherwise they could be considered residents and have to pay taxes in Switzerland.
• Request for

Operational details

Practical analysis Frontier workers who intend to move to Trasquera will have to consider the following implications: The tax at source will be withheld in Switzerland. For example, if a frontier worker earns CHF 60,000 per year in Switzerland, the source tax will only be withheld in Switzerland and not in Italy. Double taxation will be avoided with the Italian tax credit. According to the agreement between Switzerland and Italy of 1976, the labour income of border workers is subject to taxation in only one of the two countries, thus avoiding double taxation. Border workers will also need to consider the following procedures: They will need to apply for the G or B Permit, which allows them to work in Switzerland without being subject to residence restrictions. They will have to register with the Revenue Agency, which will be responsible for collecting Italian taxes and providing the tax return. In addition, frontier workers will have to consider the following expectations: The management of labour income. Border workers must take into account the Swiss and Italian tax rules to avoid being subject to double taxation. Property tax. If frontiersmen purchase property in Switzerland, they will need to consider Swiss and Italian property tax.

Concrete scenarios A border worker moving to Trasquera may need to consider the following options: * Working in Switzerland and residing in Italy. For example, a border crossing could | Non-EU/EEA member Switzerland |

References Swiss Federal Law of 14 December 1966 on Income and Wealth Taxes (RL 642.11) Agreement between Switzerland and Italy of 9 March 1976 on the Prevention of Double Taxation * New Frontier Agreement of 23 December 2020

Useful tools to protect your net income

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

Key points

Step-by-step procedure

Border workers who intend to move to Trasquera must follow the following procedures:

1. Apply for Permit G or B, which allows you to work in Switzerland as a border worker. You must apply within 14 days of arrival in Switzerland. 2. Register with the Revenue Agency, where they must provide their data and receive a registration number. 3. Manage employment income, including the calculation of taxes and the management of tax returns.

Deadlines

Border workers must consider the following deadlines:

• On 1 January 2024, the entry into force of the New Frontier Agreement, which provides for new rules for frontier workers in Switzerland.
• Registration with the Revenue Agency within 30 days of arrival in Switzerland.
• The filing of the tax return by March 31 of each year.

Tools

To learn more about working income management, check out our salary calculator, which can help you calculate your net salary and payroll taxes.

Concrete examples

For example, if a frontier earns CHF 4,500 per month and has a 10% tax, his net salary will be around CHF 4,050. If you decide to move to Trasquera, you will need to consider transfer costs, such as the cost of travel and renting an apartment.

Operational Checklists

For efficient management of employment income, it is advisable to follow the following checklist:

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