How much does it cost to live in Lugano as a cross-border commuter? (cross-border guide)

Contesto

In brief - Withholding tax on earned income withheld only in Switzerland - New Cross-Border Commuter Agreement in force from 1 January 2024 - Swiss rates: AHV/IV/EO 5.3%, ALV/AC 1.1%, UVG 0.7–1.5%, BVG 7–18% - Italian rates: IRPEF 23% up to €28,000, 35% €28,001–50,000, 43% over €50,000 ## Key facts - What: Real cost analysis for a cross-border commuter in Lugano - When: From 1 January 2024 - Where: Lugano, Switzerland - Who: Cross-border commuters working in Switzerland and residing in Italy - Amount: Variable Swiss and Italian rates The cost of living in Lugano for a cross-border commuter is a topic of great interest for those considering relocation. With the New Cross-Border Agreement coming into force on 1 January 2024, it is crucial to understand the tax implications and the real associated costs. Withholding tax on earned income is only withheld in Switzerland, while Italy avoids double taxation with the tax credit. ### Swiss and Italian rates The Swiss rates include the AHV/IV/EO at 5.3%, the ALV/AC at 1.1%, the UVG between 0.7% and 1.5%, and the BVG between 7% and 18% depending on the age group. In Italy, personal income tax ranges from 23% up to €28,000, to 35% between €28,001 and €50,000, and to 43% over €50,000. ### New Cross-Border Commuters' Agreement The New Cross-Border Commuters' Agreement, signed on 23 December 2020 and ratified by Italy with Law 83 of 13 June 2023, will enter into force on 1 January 2024. This agreement introduces new rules for cross-border commuters, including tax exemptions and exemptions. ### Real Costs A cross-border commuter considering moving to Lugano must consider various costs, including rent, transport, health insurance and food shopping. The KVG, the Swiss health insurance company, has deductibles for adults ranging between CHF 300 and CHF 2500. ### Transfer Procedure For a cross-border commuter who wishes to move to Lugano, it is important to follow a step-by-step procedure. This includes registering with local authorities, concluding a rental contract and taking out KVG-compliant health insurance. ### Useful tools To deepen the analysis of costs and tax implications, you can use the salary calculator and the CHF/EUR comparator available on the website.

Dettagli operativi

Practical implications The entry into force of the New Cross-Border Commuters' Agreement from 1 January 2024 has several practical implications for cross-border commuters working in Switzerland and residing in Italy. One of the main changes is the tax exemption for old cross-border commuters, who will benefit from a deductible of €7,500 until 2033, while new cross-border commuters will have a deductible of €10,000. ### Comparison between Old and New Cross-Border Commuters Old cross-border commuters, i.e. those who were already cross-border commuters before 17 July 2023, will enjoy a transitional regime until 2033. During this period, they will be exempt from fees up to €7,500. New cross-border commuters, on the other hand, will have a deductible of €10,000, which represents a significant increase compared to the past. ### Example of Tax Calculation A cross-border commuter earning €50,000 per year will have to consider the Swiss and Italian rates. In Switzerland, the rates include the AHV/IV/EO at 5.3%, the ALV/AC at 1.1%, the UVG between 0.7% and 1.5%, and the BVG between 7% and 18%. In Italy, IRPEF will be 43% on the part of income that exceeds €50,000. ### Possible scenarios A cross-border commuter who is in a similar situation could benefit from the Italian tax credit to avoid double taxation. However, it is important to consult with a tax expert to understand all the implications and optimize your tax situation. ### Useful tools To deepen the analysis of taxes and tax implications, you can use the salary calculator and the CHF/EUR comparator available on the website.

Useful tools for your case

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

Punti chiave

Step-by-Step Procedure For a cross-border commuter who wishes to move to Lugano, it is important to follow a step-by-step procedure to ensure a smooth transition. Here are the main steps: ### Registration with the Local Authorities The first step is to register with the local authorities of Lugano. This includes submitting the necessary documents, such as your passport and employment contract. ### Stipulating a Rental Agreement The second step is to stipulate a rental contract. It is important to choose accommodation that meets your needs and complies with local regulations. ### Taking out Health Insurance The third step is to take out health insurance that complies with the KVG. The KVG provides for deductibles for adults ranging between CHF 300 and CHF 2500. ### Useful tools To deepen the analysis of costs and tax implications, you can use the salary calculator and the CHF/EUR comparator available on the website. ### Final CTA To calculate your net salary and better understand the tax implications, use our salary calculator available on the website.