Living in Sluderno, working in Graubünden: cross-border

Context

Briefly

• Permit G is mandatory: authorizes work in the Graubünden with specific fiscal regimes for border workers
• Swiss withholding tax only: tax levied by the Graubünden Canton; Italian tax credit avoids double taxation
• €10,000 annual exemption: for new border workers effective from January 1, 2024

Key Facts

• What: Transfer to Sluderno with border worker status to work in the Graubünden
• When: New Border Workers Agreement in force from January 1, 2024
• Where: Sluderno (Sondrio province) → Graubünden municipalities (Switzerland)
• Who: Italian Revenue Agency (Italy), Graubünden Canton (Switzerland), SEM federal
• Amount: €10,000 annual exemption; AVS/AI/IPG 5.3% payroll charge

A border worker living in Sluderno and working in the Graubünden represents a consolidated reality in the Valtellina's economic fabric. The geographical proximity to Switzerland, combined with the job opportunities in the Graubünden Canton, attracts commuters who daily coordinate their residence and workplace. However, this choice has fiscal and administrative consequences that are far from marginal.

The Permit G is the document that legitimates cross-border work. For those living in Sluderno and daily commuting to work in the Graubünden, the Permit G is mandatory. Without it, the employment relationship is not legal according to Swiss regulations. The request is made to the Graubünden Canton (Migration Office), with the coordination of the State Secretariat for Migration (SEM) at the federal level. Typical processing times range from 4 to 8 weeks.

Border taxation and withholding taxes

The main consequence of choosing to live in Sluderno and work in Switzerland concerns withholding taxes on income. For border workers, tax withholding on income from work occurs exclusively in Switzerland, not in double. The Graubünden Canton levies the tax directly from the paycheck according to federal, cantonal, and local municipal rates. Italy does not apply double taxation thanks to the mechanism of tax credit provided for in the Convention between the two countries signed on March 9, 1976. In the Italian income tax declaration (Model 730), the border worker inserts the Swiss income in the CE section, where the tax credit compensates for the tax paid in Switzerland.

Two categories are crucial: 'old border workers', already border workers before July 17, 2023, benefit from exemption up to €7,500 per year (transitional regime 2024-2033). 'New border workers', from that date onwards, are entitled to an exemption of €10,000 per year. Only the part of income exceeding the exemption threshold is subject to Swiss withholding tax.

The New Border Workers Agreement, signed on December 23, 2020, and in force from January 1, 2024 (ratified by Italy with Law No. 83 of June 13, 2023), introduced these innovations to simplify the management of fiscal taxation for commuters. Discover the border tax calculator to simulate the impact on your paycheck.

Operational details

Advantages and Disadvantages of Transferring to Sluderno

Living in Sluderno for work in the Graubünden entails different practical considerations from remaining in Switzerland. Living in Sluderno means access to generally lower living costs compared to the Graubünden. Housing, food, and everyday expenses are significantly lower on the Italian side. In addition, the border resident maintains the status of Italian resident, with implications for income tax declaration, pension (INPS), and health coverage through the Italian National Health Service.

The LAMal (Swiss compulsory health insurance) remains necessary for work in Switzerland. The G permit holder has the right to opt between maintaining Italian coverage or joining the Swiss system. Swiss adult franchises range from CHF 300 to CHF 2,500 annually. For the Italian resident, the complementary pension (LPP, second pillar) is optional, while in Switzerland it would be mandatory from a certain income threshold. Mandatory Swiss contributions include AVS/AI/IPG (5.3% employee burden), AD/AC (1.1% up to CHF 148,200), LAINF (0.7–1.5%).

Daily commuting entails transportation costs and wear on the vehicle. Not all local municipalities have direct and fast connections to the Graubünden' border crossings and job centers. Administrative management becomes more complex: double declaration (Italian + communications to the Swiss cantonal contributions office), coordination between the Italian Revenue Agency and Swiss authorities, need to maintain compliance with both regimes.

Considerations on LAMal and Pension

LAMal is compulsory for those working in Switzerland. The G permit holder chooses whether to maintain Italian coverage (National Health Service, potentially integrated with private insurance) or join a Swiss health insurance fund. The choice has implications for cost and access to medical services. Those opting for the Swiss system face higher monthly premiums, but access a network with different response times and structures. Learn more about LAMal for border workers to evaluate the most convenient solution for your situation.

For pension, the border worker is subject to Swiss contributions AVS/AI/IPG (5.3% employee burden), AD/AC (1.1% up to CHF 148,200), LAINF (0.7–1.5%). If income exceeds a certain threshold (varying by canton), LPP becomes mandatory. Italy recognizes these payments: in case of return, it is possible to coordinate the Italian pension position with the Swiss one to avoid contribution gaps. Learn how AVS works for border workers and how Swiss contributions integrate with Italian pension.

Useful planning tools

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

Key points

Procedure step-by-step for transferring and requesting the G Permit

The first step is to identify the employer and ensure a formal job offer in the Canton of Graubünden. The employer then initiates the G Permit application process with the Canton of Graubünden (Migration Office). Required documentation includes: a valid passport or ID card, a certificate of no criminal record (obtained from the Sluderno Municipality), a signed employment contract, and an employer's statement on the nature and duration of the employment relationship. Processing times vary from 4 to 8 weeks.

Once the G Permit is obtained, the border worker must register with the Sluderno Municipality's Population Registry to maintain Italian residency. If a stable transfer to Switzerland is planned, a different procedure (B Permit for residence) may be followed; however, the G Permit is typical for daily or weekly commuting.

The border worker must inform their Italian bank of their Swiss work activity. It is advisable to open a local bank account in the Canton of Graubünden (with local banks) to facilitate salary receipt and tax payment to the Swiss source. Many Swiss employers require a local IBAN for salary crediting.

Income tax declaration and administrative coordination

By May 31 of the year following the first year of work, the border worker submits the Italian income tax declaration 730 (or Model Redditi for self-employed individuals), indicating in the CE section the income from Swiss work. Attach a copy of the foreign certificate (similar to the Swiss CUD provided by the employer). This documentation is essential for tax credit recognition and avoidance of double taxation.

The Canton of Graubünden, through the Federal Administration of Contributions (AFC), communicates the border worker's data to the cantonal tax office. No separate communication is required from the worker (the employer's responsibility). Before formalizing the transfer, it is helpful to simulate the fiscal impact of the new income situation. Use the calculator to estimate the net salary in Switzerland and the Italian tax credit for a clear understanding of the net take-home pay and the economic convenience of the transfer.