Third pillar 3a: advantages for the Canton of Geneva (cross-border guide)

Context

In a nutshell

• The Italian-Swiss Double Taxation Convention was signed on 9 December 1976
• The New Frontier Agreement was signed on 23 December 2020

Key facts

• What: Creation of a single tax regime for border crossers
• When: Effective January 1, 2024
• Where: Applies to all border crossers residing in Switzerland
• Who: Responsible entity: Federal Tax Administration (AFC/ESTV)
• Amount: Deductible of CHF 10,000 for new frontier workers

The New Frontier Agreement was signed on 23 December 2020 and provides for the creation of a single tax regime for frontier workers residing in Switzerland. This agreement has been ratified by Switzerland and Italy and will be in force from 1 January 2024.

The single tax regime for frontier workers provides for an exemption of CHF 10,000 for new frontier workers, who will thus be able to avoid paying income taxes in Switzerland in an amount of up to CHF 100,000. This means that frontier workers will be able to keep a greater amount of their income, which will allow them to invest in productive activities or real estate.

For example, a frontier worker who resides in Switzerland and who has an income of CHF 150,000 will be able to keep CHF 50,000 thanks to the deductible of CHF 10,000 and the maximum amount of CHF 100,000. This can help the frontier worker to invest in productive activities or in real estate, thus creating new job opportunities and

Operational details

Practical analysis

The New Frontier Agreement provides for the creation of a single tax regime for frontier workers residing in Switzerland. This scheme provides for a deductible of CHF 10,000 for new frontier workers and a deductible of CHF 7,500 for old frontier workers. Border workers residing in Switzerland must submit a tax return to the AFC/ESTV by 31 March of each year.

The New Frontier Agreement also provides for the creation of a single tax regime for frontier workers residing in Switzerland. This scheme provides for a deductible of CHF 10,000 for new frontier workers and a deductible of CHF 7,500 for old frontier workers. Border workers residing in Switzerland must submit a tax return to the AFC/ESTV by 31 March of each year.

Benefits for the Canton of Geneva

The New Frontier Agreement represents an important advantage for the Canton of Geneva, which is home to one of the largest border communities in Switzerland. According to data from the Federal Labour Office (UWFSA), in 2020, about 45,000 border workers resided in the Canton of Geneva, which represents about 20% of all Swiss border workers.

The single tax regime provided for by the New Frontier Agreement could reduce tax pressures on border workers residing in the Canton of Geneva, improving their quality of life and their competitiveness in the labour market.

Concrete examples

Suppose a frontiersman resides

Useful planning tools

To estimate your pension strategy, use the pension planner and the pillar 3 simulator.

Key points

Action

• In order to file the tax return, frontier workers will need to complete the New Frontier Agreement Form 2024, which is available on the AFC/ESTV website.
• Border workers must submit their tax return by 31 March of each year, under penalty of a penalty of CHF 500, as provided for in Article 13 of the New Border Agreement.
• It is important to note that the tax return must be filed even if the frontier workers have no income to report.
• For example, if a frontier worker earned CHF 20,000 in 2023 and paid CHF 10,000 in taxes, he/she will have to file a tax return and file his/her tax return by 31 March 2024.
• Border crossers can consult the AFC/ESTV website or contact their tax representative for more information.
• It is advisable to consult Form 2024 of the New Frontier Agreement for an overview of the rules and procedures for filing a tax return.

Operational checklist

• Check if you are a frontier worker and have income to declare
• Fill in form 2024 of the New Frontier Agreement
• Submit your tax return by March 31 of each year
• Pay taxes if you have income to report
• Check the AFC/ESTV website or contact your tax representative for more information

Concrete examples

• A frontier worker earning CHF 50,000 per year and living in Geneva will have to

Check tax deadlines for cross-border workers: returns, Swiss declarations, rebates — all dates in one interactive calendar.