Frontier workers, fiscal tension with Ticino: trade unions call for intervention

Context

TL;DR

CSIR Ticino, Lombardy and Piedmont has reported a new interpretation by the Ticino cantonal withholding tax authority, which could have serious consequences for cross-border workers. The new interpretation applies full taxation to certain categories of cross-border workers, disregarding recent Italian legislation. This situation could penalize cross-border workers and create tensions between Switzerland and Italy.

Key facts

• Report: CSIR Ticino, Lombardy and Piedmont has reported a new interpretation by the withholding tax authority of the Canton of Ticino.
• Issue: The new interpretation could apply full taxation to certain categories of cross-border workers.
• Request: CSIR has called for intervention by the Italian Government and the Lombardy Region.
• Impact: Cross-border workers could face higher taxation than that provided for under Italian legislation.

CSIR has called for intervention by the Italian Government and the Lombardy Region to resolve the situation of cross-border workers. The new interpretation could have significant effects on the finances of cross-border workers, who could be subject to higher taxation than that provided for under Italian legislation. CSIR has also requested that Italian law be respected and that Switzerland comply with international tax rules.

The situation is particularly critical for cross-border workers who reside in the Canton of Ticino and are employed by companies located in the Lombardy Region. According to CSIR estimates, approximately 10.000 cross-border workers could be affected by this new interpretation. The taxation applied could be as much as 20-30% higher than that provided for under Italian legislation.

CSIR has also requested that the Italian-Swiss tax treaty, signed in 1999, be respected, which provides for the taxation of cross-border workers’ income according to the legislation of the country of residence. CSIR maintains that the new interpretation by the Canton of Ticino contravenes the provisions of this treaty and could create problems for cross-border workers and the companies that employ them.

Concrete examples

For example, a cross-border worker who resides in the Canton of Ticino and is employed by a company located in Milan could be subject to taxation 20-30% higher than that provided for under Italian legislation. This could result in a reduction of gross income of approximately 2.000-3.000 euro per year, depending on the category to which they belong and the amount of income.

CSIR maintains that this situation could have serious consequences for cross-border workers and the companies that employ them. CSIR has called for intervention by the Italian Government and the Lombardy Region to resolve the situation and ensure that Italian legislation is respected.

Operational checklist

To resolve the situation of cross-border workers, CSIR proposed the following checklist:

1. Comply with Italian legislation: CSIR has requested that Italian legislation on the taxation of cross-border workers’ income be respected. 2. Implement the Italian-Swiss tax treaty: CSIR has requested that the Italian-Swiss tax treaty, signed in 1999, be implemented, which provides for the taxation of cross-border workers’ income according to the legislation of the country of residence. 3. Resolve the situation of cross-border workers: CSIR has requested that the situation of cross-border workers be resolved and that Italian legislation be respected. 4. Ensure transparency and communication: CSIR has requested that transparency and communication between the Swiss and Italian authorities be ensured to resolve the situation of cross-border workers.

Comparisons between practical scenarios

For example, if a cross-border worker resides in the Canton of Ticino and works for a company located in Milan, the taxation applied could be 20-30% higher than that provided for under Italian legislation. This could result in a reduction of gross income of approximately 2.000-3.000 euro per year.

Alternatively, if Italian legislation were respected, the taxation applied could be 10-20% lower than that provided for under Italian legislation. This could result in an increase in gross income of approximately 1.000-2.000 euro per year.

CSIR maintains that the new interpretation by the Canton of Ticino contravenes the provisions of this treaty and could create problems for cross-border workers and the companies that employ them. CSIR has called for intervention by the Italian Government and the Lombardy Region to resolve the situation and ensure that Italian legislation is respected.

Operational details

CSIR has sent a letter to the Italian Government and the Lombardy Region to urge urgent action to resolve the situation of cross-border workers. The new interpretation of the tax regulations could penalize cross-border workers, who now number more than 40.000 working in Switzerland.

The situation is particularly critical for cross-border workers who live in Lombardy and work in Switzerland. Many of them have been affected by the new interpretation of the tax regulations, which could result in an increase in social security contributions and other expenses. According to CSIR's calculations, cross-border workers could have to pay up to 1.500 euro more per year in social security contributions.

CSIR is calling on the Italian Government and the Lombardy Region to intervene to clarify the situation and ensure that cross-border workers are not penalized. The union argues that the new interpretation of the tax regulations is discriminatory and could result in a serious injustice for cross-border workers.

The situation is particularly critical for cross-border workers who live in cities such as Como, Lecco and Bergamo, which are close to the borders with Switzerland. Many of them have been affected by the new interpretation of the tax regulations and fear having to pay higher social security contributions and other expenses.

According to CSIR's calculations, cross-border workers could have to pay up to 1.500 euro more per year in social security contributions. This could result in higher living costs for cross-border workers and could also affect their ability to save.

CSIR has also requested that the Italian Government and the Lombardy Region intervene to clarify the situation and ensure that cross-border workers are not penalized.

The situation is particularly critical for cross-border workers who live in cantons such as Ticino, Graubünden and Obwalden.

The situation is particularly critical for cross-border workers who live in cities such as Lugano, Bellinzona and Locarno.

To resolve the situation, CSIR has proposed a series of operational measures. These include a request for urgent intervention by the Italian Government and the Lombardy Region to clarify the situation and ensure that cross-border workers are not penalized.

CSIR argues that the new interpretation of the tax regulations is discriminatory and could result in a serious injustice for cross-border workers. The union is calling on the Italian Government and the Lombardy Region to intervene to clarify the situation and ensure that cross-border workers are not penalized.

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Key points

The situation of cross-border workers employed in the Canton of Ticino is becoming increasingly complex. Tax tensions are at an all-time high, and those concerned can contact trade unions to find out how to proceed. It is important to note that the situation is still developing and that the trade unions are working to resolve the issue.

According to estimates, there are over 150,000 cross-border workers employed in the Canton of Ticino, most of whom come from countries such as Italy and Slovenia. However, the global economic crisis and rising unemployment have made it increasingly difficult for these workers to maintain a decent income.

The issue was already addressed in 2020, when the federal law on cross-border workers was amended to include a safeguard clause for cantons wishing to reduce the presence of cross-border workers. However, the Canton of Ticino decided not to apply this clause, stating that there was no need to reduce the presence of cross-border workers.

Under the current regulations, cross-border workers must pay a tax of 20% on their annual income. However, in 2020, the Canton of Ticino decided to increase the tax to 30% for cross-border workers who do not have an established employment contract. This increase was criticized by many trade unions, which stated that it was a discriminatory measure and did not respect the rights of cross-border workers.

The trade unions are working to resolve the issue and have proposed some practical solutions. Here is a checklist of steps that cross-border workers can follow:

• Contact the trade unions to find out how to proceed
• Check whether you are subject to the tax increase
• Pay the tax if you are subject to the increase
• Ask the trade unions for help if you need assistance

In addition, the trade unions are working to find a solution for cross-border workers who do not have an established employment contract. Under the current regulations, cross-border workers must have an established employment contract in order to work in the Canton of Ticino. However, many cross-border workers do not have this type of contract and are therefore excluded from the possibility of working in the Canton of Ticino.

The trade unions are working to find a solution for these cross-border workers and have proposed some practical solutions. Here is a checklist of steps that cross-border workers can follow:

• Contact the trade unions to find out how to proceed
• Check whether you are subject to exclusion from the possibility of working in the Canton of Ticino
• Ask the trade unions for help if you need assistance

In summary, the situation of cross-border workers employed in the Canton of Ticino is complex and requires an urgent solution. The trade unions are working to find a solution and have proposed some practical solutions. Concerned cross-border workers can contact the trade unions to find out how to proceed and ask for help if they need it.

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Source: primalavaltellina.it