2026 tax credit: frontier driving over 20 km (cross-border guide)

Context

In a nutshell

• From 1 January 2024, the New Frontier Agreement reforms the tax credit
• Old frontier workers: exemption €7,500, transitory until 2033
• New frontier workers: deductible €10,000; tax at source ONLY in Switzerland
• Italian tax offset in the EC framework of declaration 730

Key facts

• When: 1 January 2024 (New Agreement in force)
• What: Tax credit in the Italian declaration (EC framework 730)
• Who: Frontier G Permit holders
• Convention: Signed 9 December 1976 (double taxation CH-IT)
• Old frontier workers: Exemption €7,500 until 2033
• New frontier workers: Deductible €10,000
• Tax at source: Paid ONLY in Switzerland (not in Italy)

The New Frontier Agreement, which entered into force on 1 January 2024, modifies the tax credit system for those who work in Switzerland and reside in Italy. The main novelty concerns the calculation of the tax exemption, which rises to €10,000 per year for new border workers, while those who were already border workers before 17 July 2023 maintain the exemption of €7,500 until 2033 under the transitional regime. This reform, born from the signature of 23 December 2020, has Italian transposition in Law 83 of 13 June 2023 and is fundamental for border workers who work more than 20 km from the Ticino border, a numerically relevant category in the Swiss labour basin.

# How the border tax credit works

The tax credit is the Italian tool to avoid the

Operational details

Swiss border rates and withholdings

The border worker who works more than 20 km from the border (a frequent case for Ticino residents in Northern Italy) suffers the following withholdings in the Swiss coupon:

• AVS/AI/IPG (social security and unemployment): 5.3% to be paid by the employee
• Unemployment insurance (AD) and crisis insurance (AC): 1.1% (with annual cap CHF 148,200)
• Accident insurance (LAINF): 0.7–1.5%
• Pension fund (LPP): 7–18% according to age group (from 25th year onwards)

These Swiss income brackets are in contrast to the Italian income tax brackets (2026 tax return for 2025), which remain:

• Up to €28,000: 23%
• From €28,001 to €50,000: 35%
• Over €50,000: 43%

The difference between the two systems is crucial: in many cases, the Swiss tax paid (for social security and unemployment contributions only) is lower than the pure Italian tax, generating a positive credit in the EC framework.

Comparison scenario: old vs. new frontier

Old frontier (hired by 17 July 2023) It maintains the exemption of €7,500 until 2033. In the calculation of the credit in the EC framework, the Swiss tax paid is reduced by €7,500, and the remainder (if positive) represents the credit. This protection ensures fiscal stability until the expiry of the transitional regime.

New frontier (hired after 17 July 2023) Benefit from a larger deductible (€10,000). The impact is a reduction

Useful tools for your case

To verify your within/over 20 km tax scenario, use the net salary calculator and the tax return guide.

Key points

Compiling the 2026 declaration: step-by-step

In 2026, the border resident compiles the model 730 with this procedure:

Step 1 — Collection of Swiss documents

Before compiling, collect from the Swiss tax authority or the employer:

• Certificate of annual income tax (Quellensteuer-Bescheinigung or Certificate of Source Tax)
• Payment receipts AVS/AI/IPG
• LPP statement (cash account extract with contributions paid)
• LAINF certification if visible on the coupon

Step 2 — Section of income from work

In the D box of the 730, enter the gross income derived from the Swiss annual coupon. If the Swiss employer has already made withholdings, the net remains separate.

Step 3 — CE box (foreign tax credit)

This is the decisive calculation:

• Report the source tax paid in Switzerland (field "Tax paid Abroad")
• Indicate the Country: CH (Switzerland)
• Enter the exemption: €7,500 (old) or €10,000 (new border resident)
• Credit calculation: (Swiss tax paid - Exemption) × (Italian IRPEF medium rate) / (Effective Swiss rate)
• The 730 software often calculates the credit automatically, but it is essential that the input data is accurate.

Step 4 — Final check

Check that the CE box shows a positive credit (in your favor) or zero. If the software shows a tax debt despite the Swiss payment, check that you have correctly entered the source tax.

Operational checklist for the border resident 2026

📋 Before compiling:

• ☐ Collect all Swiss extracts (bank, tax certificate, LPP)
• ☐ Identify your status (old/new border resident and date of employment)
• ☐ Calculate the net tax paid in Switzerland (gross - legal deductions)
• ☐ Verify that the exemption in your contract is correct (€7,500 or €10,000)
• ☐ If your income exceeds €50,000, wait for the calculation of the medium IRPEF rate

☐ During compilation:

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