Lombardy confident on refill deal with Ticino (cross-border guide)

Context

Key facts

• What: The refreshment agreement between Switzerland and the Canton of Ticino
• When: Signed December 23, 2020
• After: Effective January 1, 2024
• Lombardy Region: Expresses confidence in the agreement
• Canton Ticino: Pending the ratification of Law 83 of 13 June 2023

The Lombardy Region expressed confidence in the agreement on refunds between Switzerland and the Canton of Ticino, signed on 23 December 2020 and in force from 1 January 2024. This agreement represents an important step forward for cooperation between the two regions, in particular for commercial and economic activities.

The refreshment agreement was signed between Switzerland and the Canton of Ticino to regulate the commercial and financial relations between the two parties. The treaty provides for the reduction of trade barriers and the simplification of administrative procedures, so as to facilitate the movement of goods and services between the two regions.

The Lombardy Region expressed confidence in the agreement, underlining the importance of cooperation between the two regions for economic and commercial development. The Lombardy Region also expressed the hope that the agreement could be a model for future trade negotiations between Switzerland and other Italian regions.

The Canton of Ticino, on the other hand, awaits the ratification of Law 83 of 13 June 2023, which provides for the ratification of the agreement on refreshments. The ratification of the law is necessary to give effect to the treaty and make it binding for

Operational details

The agreement on refunds between Switzerland and the Canton of Ticino provides for the reduction of the withholding tax on labour income for border workers. The Lombardy Region expresses confidence in the agreement, which will be in force from 1 January 2024.

The reduction of the withholding tax on labour income for border workers is an important step to simplify trade relations between Lombardy and the Canton of Ticino. Under the agreement, border workers working in Switzerland will be able to benefit from a reduction in withholding tax on employment income, from 10% to 5% for amounts up to 80,000 Swiss francs (CHF) per year. For higher amounts, the withholding will remain at 10%.

The Lombardy Region expressed confidence in the agreement, stressing that the reduction in the withholding tax on labour income for border workers could help reduce the tax burden on workers and increase the competitiveness of local businesses. In addition, the agreement will also help reduce bureaucracy and simplify trade relations between Lombardy and the Canton of Ticino.

The Canton of Ticino has already implemented some measures to simplify trade relations with Lombardy. For example, the region has introduced a system of “direct payments” that allows frontier workers to receive their salary directly in Switzerland, without having to pay withholding on labour income.

The Lombardy Region has also prepared an operational checklist to help businesses

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Key points

The Lombardy Region expressed its confidence in the agreement being defined between Lombardy and the Canton of Ticino for the reduction of the withholding tax on the labour income of border workers. This agreement, once implemented, could have a significant impact on the pockets of frontier workers who travel to Switzerland every year to work.

Border workers will be able to benefit from the reduction of the withholding tax on work income, which will go from 20% to 10%. It is advisable to consult the salary calculator to calculate your income and understand how this change could affect your financial situation.

According to estimates by the Lombardy Region, a frontier worker earning 50,000 Swiss francs a year could save up to 5,000 Swiss francs a year thanks to this reduction in withholding. This means he could go home with a higher net income.

The Lombardy Region has also provided an operational checklist to help border guards understand how the agreement works and how they will benefit from it. Checklist includes:

• Check if you are eligible for the benefit of the reduction of the withholding tax on income from work
• Calculate the net income before and after the application of the agreement
• Check if you have already benefited from other tax treatments in Switzerland
• Seek advice from a tax professional if you are unsure how the arrangement works

The Canton of Ticino has