Swiss cross-border commuters, how the new 25% flat tax works
Article 6 of the Omnibus Decree introduces, as of the 2024 tax period, a new optional tax regime for a specific category of border workers residing in certain Italian municipalities within 20 km of the Swiss border
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Key points
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Article 6 of the Omnibus Decree introduces, starting from the 2024 tax period, a new optional tax regime for a specific category of border workers residing in certain Italian municipalities within the 20 km zone from the Swiss border, who are employed in the Swiss border area by an employer resident in the Swiss country. These are, in particular, taxpayers residing in Italian municipalities located near Switzerland who, according to the new Agreement between Italy and Switzerland on the taxation of frontier workers of 23 December 2020 (which applies from 1 January 2024), are considered 'frontier workers', even though they were not such previously. In fact, the list of municipalities for the attribution of frontier status was not contained in the previous agreement, but was drawn up by the cantons of Graubünden, Ticino and Valais. The beneficiaries of the new regime, instead of the progressive Irpef taxation with the right to a tax credit for income earned abroad (provided for by the new Agreement for the 'new frontier workers'), will be able to opt for the taxation of employment income earned in Switzerland by applying a substitute tax of the Irpef and the relative surcharges equal to 25 per cent of the taxes paid in the Swiss country on such income, without the right to a tax credit.
The tax burden
.In this way, the overall tax burden on this category of workers is comparable to that applicable to 'old frontier workers', to whom the transitional regime governed by Article 9 of the new Agreement applies, since they reside in municipalities which, both in the past and in the new Agreement, allow the application of the tax regime reserved for frontier workers. The exercise of the option also entails the obligation to pay to the region of residence a co-participation fee to the National Health Service under the provisions of Article 1, paragraphs 237 to 239 of the Budget Law 2024. 20% of this charge is deductible from the substitute tax due.
The requirements for exercising the option
.In addition to the requirement to qualify as a frontier worker under the new Agreement, in order to be able to exercise the option, the worker must:
was employed in Switzerland in the cantons of Graubünden, Ticino and Valais for a Swiss employer between 31 December 2018 and 17 July 2023;
holds employment income taxed according to the criteria of Article 3 of the aforementioned Agreement, i.e. withholding tax in Switzerland on 80% of the taxable base;
