Moving to Saltrio by border crossing: pros and cons (cross-border guide)

Context

In a nutshell

• The New Frontier Agreement was signed on 23 December 2020 and will be in force from 1 January 2024. - Italy avoids double taxation with the tax credit. - Border workers who intend to move to Saltrio must inquire about the new law and the new taxes.

Moving to Saltrio from a border crossing: pros and cons

On 23 December 2020, the New Frontier Agreement was signed, creating a new tax regime for frontier workers. As of 1 January 2024, this agreement will be in force, opening up new prospects for cross-border workers who intend to relocate to Saltrio. But what does it mean to them? And what are the pros and cons of this new regime?

The Pros of the New Frontier Agreement

The New Frontier Agreement provides for the creation of a tax credit to avoid double taxation. This means that border crossers will be able to enjoy a reduction in taxes on their income, without having to pay the same taxes in both countries. For example, if a frontier worker earns 50,000 Swiss francs a year, he will benefit from a tax credit of about 10,000 francs, thanks to which his tax income will be 40,000 francs.

I against the New Frontier Agreement

However, the New Frontier Agreement is not without its drawbacks. One of the main disadvantages is the complexity of tax rules. In fact, border workers will have to face a series of bureaucratic formalities to obtain the

Operational details

The New Frontier Agreement provides for labour income tax for frontier workers, which will be withheld in Switzerland and not in Italy. This means that frontier workers who intend to move to Saltrio must take into account the new taxes and rules.

What changes for border workers?

The New Frontier Agreement introduces some significant changes for frontier workers who intend to move to Saltrio. The main novelty is that the income tax from work will be withheld in Switzerland and not in Italy. This means that frontier workers will have to pay labour income taxes in Switzerland, rather than in Italy.

Concrete examples

Suppose an Italian frontier worker has a working income of CHF 50,000 per year and decides to move to Saltrio. Under the New Frontier Agreement, income tax will be withheld in Switzerland and not in Italy. This means that the frontier worker will have to pay a labour income tax of around 7.5% of income, or CHF 3,750 per year.

In comparison, if the frontier worker had paid labour income taxes in Italy, he would have had to pay a labour income tax of about 10% of income, or CHF 5,000 per year.

Regulations and dates

The New Frontier Agreement entered into force on 1 January 2023. The new rules and taxes are applied as of this date.

Operational checklists

To move to Saltrio from

Useful tools to protect your net income

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

Key points

If you are a border worker and intend to move to Saltrio, it is important to inquire about the new law and new taxes. You can consult the Swiss Government website or contact a tax advisor for more detailed information.

The law in question is the Federal Property Tax Act (LIF), which has been amended as of 1 January 2023. According to the new law, border workers who intend to move to Saltrio will have to pay property taxes in Switzerland, despite their permanent residence in Italy.

For example, if a border worker has a property in Saltrio and decides to move there, he will have to pay property taxes in Switzerland, even if his income is generated in Italy. This means that you will have to pay taxes in Switzerland on a property that is no longer used as a second home.

Under federal law, property taxes are calculated based on the value of the property and its location. The value of the property is determined by the market value, while its location affects the type of tax that must be paid.

For example, if a frontier worker has a property in Saltrio with a market value of 500,000 Swiss francs, he will have to pay property taxes in Switzerland. The tax is 0.85% per annum on the value of the property, so the frontier worker will have to pay 4,250 Swiss francs per annum.

It is important to note that the federal law on

Evaluating a Ticino job offer? Simulate your net payslip: enter gross salary, marital status and municipality for a detailed breakdown.