Switzerland and Italy: tax meeting in Rome by June

Context

In a nutshell

• Institutional meeting between Switzerland and Italy scheduled by the end of June.
• Focus on tax aspects related to cross-border work.
• Objective: to monitor the application of the new Frontier Agreement.

Key facts

• What: Technical meeting on tax aspects
• When: By the end of June
• Where: Rome
• Who: Delegations Switzerland and Italy

The panorama of tax relations between Switzerland and Italy is preparing for a new moment of institutional confrontation. As reported by recent news, a meeting is scheduled in Rome by the end of June, focused specifically on the tax aspects involving relations between the two countries. This summit represents a crucial step for the management of cross-border work dynamics, at a time when the application of the New Frontier Agreement, in force since 1 January 2024, requires constant and coordinated monitoring between the competent authorities.

The current regulatory framework

The meeting is part of a consolidated regulatory context, regulated by the New Border Agreement signed on 23 December 2020 and ratified in Italy with Law 83 of 13 June 2023. For Article 9 of the Agreement, “old frontier workers” are people who met the tax requirements and worked in Graubünden, Ticino or Valais on 17 July 2023 or during the period from 31 December 2018 through 17 July 2023. Article 9 keeps covered employment income taxable exclusively at source in Switzerland; other workers follow the ordinary regime, with ordinary taxation in Italy, a credit for Swiss tax and Swiss withholding at 80% of the ordinary rates. The €10,000 figure in Article 4 of Italian Law No. 83/2023 is only the income limit referred to in Article 1(175) of Law No. 147/2013; it is not a general allowance for new frontier workers. Sources: ESTV factsheet (Italian) · Agreement, Art. 9 · Law No. 83/2023, Art. 4. Old cross-border workers remain taxed only in Switzerland (Art. 9 of the 2020 Agreement).

Operational details

Practical Implications Analysis

The Rome meeting assumes significant relevance for the daily life of thousands of workers crossing the border. The discussion goes beyond mere bureaucratic technicalities, aiming to consolidate the certainty of the law for those providing services in Swiss territory. One of the central issues concerns the correct application of tax rates and social security contributions, which in Switzerland are managed according to well-defined federal and cantonal laws. Regarding social security, the AVS/AI/IPG contributions (5.3% at the employee's expense) and the unemployment insurance (AD/AC, 1.1% up to a ceiling of 148,200 CHF) represent fixed expenditure items that affect net income.

Tax Regime Comparison

The Swiss taxation system, managed by the Federal Administration of Contributions (AFC/ESTV) and the cantonal offices, differs significantly from the Italian one. While in Switzerland the withholding tax is directly deducted from the salary, in Italy the taxpayer must deal with the IRPEF tax rates, which range from 23% for incomes up to 28,000 euros, to 33% for the range between 28,001 and 50,000 euros, up to 43% for the amount exceeding 50,000 euros. The Rome meeting could provide clarifications on how these divergences are harmonized in daily practice, ensuring that workers do not bear disproportionate tax burdens. The management of LAMal (health insurance) is another crucial node: G permit holders enjoy the right to opt, being able to choose between the Swiss and Italian systems, with franchises ranging from 300 to 2,500 CHF for adults. Understanding these mechanisms is facilitated by the use of digital tools that allow for precise calculation of the fiscal impact on income calculate your net salary.

Useful tools for your case

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

Key points

Procedures and operational steps

For workers, the period preceding and following this type of bilateral meeting is ideal for verifying their fiscal position. It is essential to ensure that all documentation related to income earned in Switzerland is correctly preserved and ready for tax declaration in Italy. Those working abroad must pay particular attention to the documents provided by the Swiss employer, especially the salary certificate, indispensable for correctly completing the CE form. Fiscal transparency, supported also by the activity of entities such as the Italian Revenue Agency and the Ministry of Economy and Finance (MEF), remains the best protection for the worker.

Useful tools for the border worker

In addition to document control, it is advisable to constantly monitor the legislative developments that may arise from the dialogue between Rome and Bern. Pre-retirement planning, which includes the second pillar (LPP/BVG, with variable contributions between 7% and 18% depending on age, starting from 25 years), requires careful management. For those who want to optimize their financial situation, the use of comparison tools is a fundamental step. For example, monitoring the cost of living or the exchange rate trend can help manage resources better compare the cost of living. We remind you that for any specific doubt on your pay slip or the correct application of deductions, the first point of reference remains the consultation of official portals, where it is possible to verify your pay slip. The June meeting represents an opportunity for dialogue that, although oriented at a macro-economic level, has the ultimate goal of simplifying the lives of border workers, reducing uncertainties and promoting greater stability in transfrontier labor relations between the two states.