There is absolutely no systemic error (cross-border guide)

Context

In a nutshell

• Ticinonline denies the rumours about systemic errors in the treatment of border workers.
• The New Frontier Agreement was signed on 23 December 2020 and will enter into force from 1 January 2024.

Details on the New Frontier Agreement

On 23 December 2020, the Border Agreement was signed by the Ticino and Swiss authorities, with the aim of simplifying and improving the treatment of border workers. This agreement will enter into force on 1 January 2024 and will apply to all workers who carry out work in the Canton of Ticino, but reside in Switzerland.

Systemic errors: an unfounded issue

With regard to the rumours about systemic errors in the treatment of frontier workers, Ticinonline categorically denies these claims. According to official sources, the treatment system for border crossers was carefully checked and no systemic errors were found.

How the New Frontier Agreement works

The New Frontier Agreement provides for some significant changes compared to the previous agreement. Some of the main new features include:

• Operating instructions : the Ticino authorities have established a 10-point checklist to ensure the correct application of the regulations. Here are some examples:

+ Point 1: the frontier worker must submit a declaration of work certified by the employer by 15 January of each year. + Point 2: the frontier worker must

Operational details

Practical analysis

The New Frontier Agreement provides for a series of changes to the treatment of frontier workers, including the abolition of double taxation. Italian border workers are exempt from taxes in Switzerland, thanks to the tax credit granted by Italy.

The tax credit is calculated on the taxable income in Switzerland and can reach up to 90% of the income, as required by Italian legislation of 2020 (Legislative Decree no. 119/2018, article 28, paragraph 1). This means that an Italian frontier worker earning 100,000 Swiss francs a year could be exempt from taxes in Switzerland, thanks to the tax credit granted by Italy.

For example, an Italian frontier worker who works in Lugano and earns 80,000 Swiss francs a year could be exempt from taxes in Switzerland, thanks to the tax credit granted by Italy. According to the Italian legislation of 2020, the tax credit would be calculated as follows:

• Taxable income in Switzerland: 80,000 Swiss francs
• Tax credit: 90% of income = 72,000 Swiss francs
• Exempt tax: CHF 72,000

In this scenario, the Italian frontier worker could be exempted from taxes in Switzerland, thanks to the tax credit granted by Italy.

However, it is important to note that the tax credit is not automatic and requires the filing of a tax return in Italy. In addition, the tax credit may be reduced or cancelled if the

Useful tools to protect your net income

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Key points

Action

To learn more about this, it is advisable to consult the Frontaliere Ticino calculator, which provides information on the taxation of border workers.

Cross-border work in Ticino is a complex and delicate issue, which requires a thorough knowledge of tax regulations and requirements for foreign workers. There is absolutely no systemic error, but it is crucial to understand the rules and exceptions to avoid problems and penalties.

On 1 January 2020, the Federal Law on the Taxation of Frontier Workers came into force, which introduced new rules for foreign workers working in Switzerland. The law states that frontier workers are subject to Swiss tax regulations, but with some exceptions and derogations.

For example, frontier workers working in Ticino are exempt from federal income tax, but are subject to cantonal income tax. The cantonal income tax in Ticino is 5.9% for income up to CHF 20,000 and 10.8% for income over CHF 20,000.

In addition, border workers working in Ticino can benefit from a 50% deduction for transport and accommodation costs. However, this deduction is subject to a threshold of CHF 10,000 per annum.

It is important to note that tax regulations for frontier workers may vary depending on the canton and individual situation. Therefore, it is essential to consult the Border Ticino calculator and the tax service