SMAC and border deductions 2025: simulations and tax impact (cross-border guide)

Context

In a nutshell

• Analysis of tax deductions for border workers 2025
• Application of the new tax agreement in force since 2024
• Focus on tax credit and tax return

Key facts

• What: Border deductions and tax treatment
• When: Income tax return 2025
• Where: Italy-Switzerland
• Who: Frontier workers
• Amount: Variable thresholds based on the tax regime

The analysis of the effects of SMAC deductions for frontier workers as part of the tax return in Italy for 2025 is a topical issue for those serving in the Canton of Ticino. The regulatory framework of reference has been profoundly renewed by the entry into force, on 1 January 2024, of the new tax agreement between Italy and Switzerland, ratified by Law 83 of 13 June 2023. This agreement introduced a sharp distinction between so-called 'old frontiersmen', i.e. those who were already such before 17 July 2023, and new hires, who fall under the new provisions.

The current regulatory framework

The taxation system for border workers working in Switzerland provides for tax at source, which is withheld directly in Swiss territory. Italy, to avoid double taxation, allows workers to recover the taxes paid through the tax credit mechanism to be included in the EC framework of model 730. It is essential to remember that Switzerland is not a member of the Union

Operational details

The practical analysis of deductions requires special attention towards the correct compilation of the tax return for the tax year 2025. For the frontier worker who receives his salary in Swiss francs, the conversion into euros assumes a crucial role, as does the management of social contributions paid in Switzerland. Contributions such as AVS, AI and IPG, equal to 5.3% borne by the employee, together with unemployment (AD/AC) of 1.1% (with a ceiling set at CHF 148,200), LAINF and LPP (which varies between 7% and 18% based on age), constitute essential components that reduce net taxable income before Italian taxation.

Comparison Scenarios

A worker who falls under the 'old frontier' scheme must consider the impact of the 7,500 euro deductible applied on the share of income received. On the contrary, for new frontier workers, the threshold of 10,000 euros allows a greater tax capacity during the declaration phase. It is essential to monitor the simulations provided by the experts to understand how the SMAC deduction fits into this landscape. The tax credit is calculated in proportion to the taxes actually paid in Switzerland, preventing the worker from paying twice for the same income. However, the complexity of the calculation often requires the use of digital tools to avoid errors that could lead to disputes from the Agency of

Useful planning tools

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

Key points

To properly proceed with the 2025 tax return, the frontier worker must first collect all the documentation issued by the Swiss employer. The salary certificate is the primary document, containing all withholdings made at source and social contributions paid. It is necessary to carefully verify that the figures reported correspond to what was actually received during the calendar year. The procedure involves entering the data in the 730 form or in the Personal Income form, using the sections dedicated to income produced abroad. The calculation of the tax credit must be carried out accurately to correctly offset the personal income tax due in Italy.

Operating procedure and tools

The advice of professionals experienced in cross-border taxation remains recommended for those who are dealing with complex situations, such as the possession of multiple sources of income or the presence of additional deductible charges. The use of a calcolatore dedicated to the payroll allows you to simulate the impact of deductions in real time and estimate the amount of taxes to be paid. It should be remembered that the deadline for submitting the declaration must be strictly respected to avoid penalties. In addition, the correct management of AVS/LPP payments is essential to guarantee the accrual of pension rights both in Switzerland and in Italy. To deepen the topics