Living in Vedano Olona and working in Ticino: a complete guide

Context

In a nutshell

• Tax at source withheld ONLY in Switzerland for border workers with G Permit
• New Frontier Agreement in force from 1 January 2024 (signed 23 December 2020)
• Exemption €7,500 for old border crossers; €10,000 for new entrants after 17 July 2023
• Italy-Switzerland double taxation agreement: tax credit on EC form 730

Key facts

• What: Special tax regime for border workers resident in Italy, employed in Switzerland
• When: Agreement in force from 1 January 2024; double taxation convention of 9 March 1976
• Where: Lombardy-Ticino border; Chiasso, Brogeda, Gaggiolo passes
• Who: Frontier workers with G Permit (SECO/SEM); INPS (Italy) and AFC (Switzerland) for taxation
• Amount: Employee AVS/AI/IPG rate 5.3% (Swiss withholding tax); Italian personal income tax 23-43% according to income

Living in Vedano Olona and working in Ticino means becoming a border worker in the bilateral Italy-Switzerland regime. The choice to live in Lombardy while receiving a Swiss salary entails precise tax implications, governed by the Convention of 9 March 1976 and the New Frontier Agreement which entered into force on 1 January 2024. Anyone working in Switzerland with a cross-border G Permit is subject to withholding tax ONLY in Switzerland, while the tax credit in Italy (EC Framework 730) avoids double taxation during the year. This is the fundamental principle that guides all

Operational details

Taxation and bilateral agreement

The Convention between Italy and Switzerland to avoid double taxation (9 March 1976) establishes that the income from employment of a border worker is taxable in the country where the work is carried out, i.e. Switzerland. This means that the gross salary is subject to withholding tax directly in Ticino, according to the federal and cantonal rates in force. The Ticino source tax is not an additional tax, but an advance of the tax due; the border worker then recovers the surplus by means of the EC form of declaration 730 in Italy.

For the fiscal year 2024 and subsequent years, the New Agreement provides for the border worker to file a tax return in Italy (730 or Income if freelance/VAT number), reporting the Swiss income net of withholding tax. In the EC framework, it declares the tax paid in Switzerland; the Revenue Agency compares this with the Italian personal income tax due (23% up to €28,000, 33% between €28,001 and €50,000, 43% over €50,000). If the Swiss tax is lower, the frontier worker completes in Italy; if it is higher, he receives a credit (which is not converted into a direct refund for frontier workers, but is compensated with future taxes according to Italian legislation).

Contributions and social security

An often-misunderstood aspect concerns social security contributions. The border worker resident in Italy is registered with the INPS for Italian social security, not with the AVS (old-age and

Useful planning tools

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

Key points

Practical Procedure: Step-by-Step

For those already living in Vedano Olona or about to move, the concrete steps are as follows: 1. Verification of Border Crosser Qualification. Contact the SEM in the Ticino canton where the employer is based (e.g., SEM Ticino in Bellinzona). Verify if the employer is already registered and if the Permit G application can be submitted directly online or through the counter. 2. Document Collection. Valid passport or ID, Swiss employment contract, proof of residence in Vedano Olona (cadastral extract or municipal certificate), banking documentation, and previous year’s income statement (if available). 3. Application for Permit G. The Swiss employer, in coordination with the border crosser, submits the application to the competent cantonal authorities. Permit G is generally free and takes 2 to 6 weeks to process. 4. Registration with INPS. Once the permit is obtained, the border crosser (or employer, depending on the procedure) registers the employment relationship with INPS using the SR163 form. This activates the Italian social security coverage and ensures protection against work-related accidents and diseases according to Italian regulations. 5. Coordination with AFC (Federal Tax Administration). The Swiss salary is communicated by the employer’s office to AFC, which applies the withholding tax according to the canton (Ticino) and tax class. No personal intervention is necessary, but it’s crucial to verify the correct residence address in the pay slip (indicated as “Wohnort: Italy” or similar). 6. Italian Tax Declaration (730). By April 30th of the following year (or May 31st for electronic declarations), the border crosser declares the Swiss gross income, tax paid in Switzerland, and applies the tax credit in the CE framework to the Italian Revenue Agency. If due, pay the Italian tax supplement; if overpaid in Switzerland, the credit carries over to subsequent years. 7. Annual Deadlines. Check by June of each year if the income bracket has changed (e.g., due to a salary increase) and if this affects the exemption (€7,500 or €10,000 depending on the start date of border crosser activity). Promptly notify the employer and INPS of any changes.

Useful Tools and Contacts

To delve into the tax impact of your specific Swiss gross salary, use our site’s net salary calculator, which simulates Ticino withholding tax and the net amount received, considering AVS/AI/IPG deductions and cantonal contributions. For permit procedure questions, contact the cantonal SEM directly or consult the Seco (Swiss State Secretariat for the Economy) website. For doubts on the 730 declaration, consult a border crosser specialized accountant or the Italian Revenue Agency, which offers dedicated counters near border crossings (e.g., Chiasso Revenue Agency Office).