Cutting refreshments, Canton Ticino attacks health tax (cross-border guide)

Context

In a nutshell

• State Councillor Christian Vitta stated that he wanted to attack the mechanism of refreshments for border workers.
• The Canton of Ticino wants to cut the share of border workers paid as' compensation '.

The problem of refreshments

The refreshment system was introduced in 1995 to compensate border workers for health care expenses incurred in their country of residence. However, over the years the system has been enriched with complexity and criticism. According to estimates, Swiss border workers residing in the Canton of Ticino pay about 120 million francs of health tax annually, which represent only a part of the total refunds.

The intent of the Councilor of State

State Councillor Christian Vitta said he wanted to attack the mechanism of refunds for border workers. The objective is to reduce the share of border workers paid as' compensation ', that is, the part of the refunds that is not covered by the contributions of the border workers themselves. According to Vitta, the current system is unfair and creates economic damage for border workers.

Comparison with the Canton of Graubünden

The Canton of Graubünden, which borders Italy, has already implemented a different refreshment system. According to estimates, Grison border workers pay about 40 million francs of health tax annually, which represents only a part of the total refunds. The Grison system provides a lower coverage rate than the Ticino system, the

Operational details

Key facts

• Tax at source on income from work: ONLY withheld in Switzerland for border workers.
• New Frontier Agreement: signed on 23 December 2020, in force since 1 January 2024.
• Old frontier workers (already before 17 July 2023): exemption of €7,500, transitional regime 2024-2033.
• New frontier workers: deductible of €10,000.

Canton Ticino Attacks Health Tax: Cutting Refreshments On 17 July 2023, the Federal Council adopted the Federal Health Tax Act, which entered into force on 1 January 2024. Under the new legislation, border workers will no longer be exempt from health tax in Switzerland, but only those who reside in the country of origin.

The new approach is expected to reduce the tax burden on border workers, who would have paid the health tax twice: once in Switzerland and once in their country of origin. However, for border crossers residing in Switzerland, the situation does not change much.

The Canton of Ticino, known for its economy strongly linked to the tourism sector, may be interested in taking advantage of this new scenario to attack the health tax and reduce the tax burden on restaurants.

Here are some concrete examples:

• A border worker who resides in the country of origin and works in Switzerland could pay the health tax only once, in their country of origin.
• A frontier worker who resides in Switzerland and works in Switzerland will not be exempted from the

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Key points

Practical analysis

State Councillor Christian Vitta said he wanted to attack the mechanism of refunds for border workers. The share of border workers paid as' compensation 'could be cut. This could have a significant impact on the lives of border crossers.

State Councillor Vitta stated that the Canton of Ticino is willing to discuss and review the health tax for border workers. This tax was introduced in 2019 to cover the health expenses of border workers using Swiss health services. The fee is CHF 150 per year for each frontier worker.

The share of border workers paid as' compensation 'could be cut from 20% to 30%. This means that border workers could pay less to use Swiss health services. However, this could have a negative impact on the balance of the Canton of Ticino, which could lose significant revenue.

State Councillor Vitta said that the Canton of Ticino is willing to discuss and review the health tax for border workers. This could lead to a reduction of the tax or its abolition. However, this may require an agreement between the Canton of Ticino and the other Swiss cantons.

The Canton of Ticino is not the only one discussing the health tax for border workers. Other cantons, such as the Valais Canton and the Graubünden Canton, have already discussed this issue. The Canton of Valais has introduced a tax

For a precise net salary calculation, use our tax comparator: compare take-home pay between G and B permits with all 2026 deductions.

Source: ilgiorno.it