Cross-border worker living in Italy: existing or new, which tax regime applies to you?

Two colleagues make the same journey every morning, from Como to Lugano, for the same salary. One pays tax only in Switzerland; the other pays a reduced tax in Switzerland and then a tax in Italy. What separates them is neither their permit, nor their nationality, nor their current employer, but a date: 17 July 2023, the day the agreement between Switzerland and Italy on the taxation of cross-border workers entered into force. This guide helps you determine your category, read your withholding tax, prepare the Italian tax return of a new cross-border worker and spot the situations in which the agreement no longer applies.

1. Existing or new cross-border worker: which category are you in?

You are an existing cross-border worker if you were a cross-border worker for tax purposes in Ticino, Graubünden or Valais at any time between 31 December 2018 and 17 July 2023; otherwise, you are a new cross-border worker. Article 9 of the agreement of 23 December 2020 between Switzerland and Italy on the taxation of cross-border workers (SR 0.642.045.43, text in French) reserves the transitional regime for residents of Italy who, on the date of its entry into force, are working, or worked between 31 December 2018 and that date, as employees in the Swiss border region for a Swiss employer. The agreement has been in force since 17 July 2023 and has applied since 1 January 2024.

The Federal Tax Administration (FTA) has clarified several points in its FAQ:

• no minimum period of employment is required during the period, but the employer must have paid the corresponding withholding tax to the canton;
• it is enough to have been a cross-border worker for tax purposes at some point during the period, whatever job you held afterwards, including if you left the 20 km zone during the period and returned to it later;
• a job as an apprentice or trainee under a G permit during the period counts;
• nationality plays no role: only tax residence counts.

One exception: if you live in a municipality listed in the annexes to Italian Decree-Law no. 113 of 2024, you may be taxed as a new cross-border worker even if you were already working in Switzerland during that period (section 5).

If you disagree about your category, the additional protocol to the agreement provides that you may request the opening of a mutual agreement procedure between the administrations of the two countries. In practice, contact the tax administration of the canton of employment first.

2. Who is a cross-border worker within the meaning of the Italy-Switzerland agreement?

Anyone who meets three conditions at once, which Article 2(b) of the agreement sets for existing and new cross-border workers alike. You must:

• be tax resident in an Italian municipality whose territory lies, wholly or partly, within 20 km of the border;
• work as an employee in the Swiss border region, that is, in Ticino, Graubünden or Valais, for an employer, a permanent establishment or a fixed base located in Switzerland;
• in principle return every day to your main home in Italy.

The list of municipalities is authoritative. It is set out in the mutual agreement of 22 December 2023, applicable since 1 January 2024 (Annex B for Italian municipalities). The file the FTA provides for payroll software lists 518 of them, in the regions of Lombardy, Piedmont and Aosta Valley and in the autonomous province of Bolzano: it includes, for example, Como, Varese, Luino, Sondrio, Domodossola, Verbania and Aosta, but neither Busto Arsizio nor the city of Lecco. This file is only a tool; if in doubt, it is the annex to the mutual agreement that counts.

The daily return allows some tolerance. The additional protocol allows up to 45 days per calendar year without returning home for work reasons; holidays and sick days are not counted. Beyond that, the FTA states that the person loses cross-border worker status for the year concerned. Our guide to non-return days for cross-border workers details this count. Telework from home in Italy has its own cap, 25% of working time, explained in our guide to telework for cross-border workers living in Italy.

3. Existing cross-border worker: how are you taxed, and until when?

Only in Switzerland, through withholding tax at the ordinary tariffs, and with no end date set by the agreement. Article 9(1) provides that the salary of an existing cross-border worker remains taxable only in Switzerland. Italy does not tax this salary: there is no allowance to calculate and no tax credit to claim. The employer applies the ordinary tariffs A, B, C or H (single person, married couple with one income, with two incomes, single-parent family), the same as for employees resident in Switzerland who are taxed at source, and the salary data of an existing cross-border worker are not part of the annual exchange of information with Italy.

The 2033 date does not concern your tax. It concerns the financial compensation: for tax years up to 2033, each of the three cantons pays the Italian border municipalities 40% of the withholding tax levied on existing cross-border workers. The FTA states that from the 2034 tax year, Switzerland will keep all of this revenue. Nothing in the agreement provides that exclusive taxation in Switzerland ends on that date. The agreement is, however, reviewed every five years.

Changing employer does not make you lose the status. The exchange of letters accompanying the agreement states that existing cross-border workers remain taxable only in Switzerland, regardless of any termination of the employment relationship or change of employer, on two conditions:

• continuing to meet the definition of a cross-border worker in section 2 (a municipality within 20 km, in principle a daily return home);
• working in the border region, in Ticino, Graubünden or Valais, for a Swiss employer.

An existing cross-border worker who accepts a job in Zurich, or who moves to Milan, therefore no longer meets the conditions of the transitional regime for as long as that situation lasts. The agreement also provides that the two administrations may consult each other in the event of manifest abuse of existing cross-border worker status.

4. New cross-border worker: how much does Switzerland withhold?

At most 80% of the ordinary withholding tax, under tariffs R, S, T or U, which already include this reduction. Article 3(1) of the agreement caps the tax of the State of employment at 80% of the income tax that would be levied there, federal, cantonal and municipal taxes included. Tariffs R, S, T and U correspond to tariffs A (single person), B (married couple with one income), C (married couple with two incomes) and H (single-parent family): your employer therefore does not apply a second reduction.

The table below shows the rates for the canton of Ticino for 2026, as they appear in the tariff file the FTA publishes for payroll software, with no children and without church tax, which the Ticino tariffs do not include. The rate applies to the gross monthly salary subject to withholding tax.

Over a year, a single person earning 6,000 francs a month has 7,272 francs withheld as an existing cross-border worker and 5,760 francs as a new one, or 1,512 francs less. This gap does not measure the difference in total tax burden: the new cross-border worker then owes Italian tax (section 5). The agreement also provides that the total burden of a new cross-border worker resident in Italy must not be lower than the tax they would have paid under the 1974 agreement.

These rates vary with the salary bracket: at 6,001 francs, the rate rises to 10.2% under tariff A0 and to 8.1% under tariff R0. The tariffs of Graubünden and Valais are different. Our guide to withholding tax tariffs explains how to read the code shown on your payslip.

As for an existing cross-border worker, the withholding is final in Switzerland: there is no subsequent ordinary assessment. A new cross-border worker claims the Swiss tax in Italy, in the form of a tax credit.

5. New cross-border worker: what do you declare in Italy?

Your entire Swiss salary, of which only the part above 10,000 euros is taxable, then the Swiss tax as a tax credit. Italy, as the State of residence, taxes the salary and eliminates double taxation under Article 24 of the 1976 double taxation convention, to which Article 5 of the agreement refers.

The 10,000-euro allowance

Article 4 of Italian Law no. 83 of 13 June 2023, which ratifies the agreement, raises from 7,500 to 10,000 euros the allowance for salaries earned abroad by cross-border workers, from the 2024 tax year. Only the part of the salary above this amount enters Italian taxable income. In its circular no. 25/E of 18 August 2023, the Agenzia delle Entrate states that this increase applies to all cross-border workers, not only to those working in the Swiss border area, provided they travel abroad to work every day.

The same law provides two other rules that are useful to all cross-border workers: family allowances paid by the Swiss fund are not taxable in Italy (Article 6), and sector early-retirement contributions paid in Switzerland are deductible from Italian income (Article 5).

The tax return and the tax credit

In the 730 return, according to the 2026 instructions of the Agenzia delle Entrate, the salary is declared in quadro C with code 4, reserved for employment carried out abroad in a border area, for its full amount: the tax calculation, made by the tax assistance centre (CAF) or the professional who submits the 730, only takes into account the part above 10,000 euros. The Swiss tax is entered in quadro G, rigo G4, as a credit for taxes paid abroad, once it has become final; the withholding of a cross-border worker, which cannot be the subject of a subsequent ordinary assessment, is in principle final. For 2025 income, the deadline for the 730 was 30 September 2026; that for the Redditi Persone fisiche return falls on 2 November 2026, because 31 October is a Saturday.

The amount of Italian tax depends on your personal situation: the IRPEF scale, regional and municipal surcharges, and deductions for dependants. We do not put a figure on it here; a tax assistance centre or an Italian accountant can estimate it from your Swiss salary certificate.

A special case: the 25% substitute tax

Employees who live in one of the municipalities listed in the annexes to Italian Decree-Law no. 113 of 9 August 2024 (municipalities in the 20 km zone missing from the lists of the former 1974 agreement, certain municipalities in the provinces of Brescia and Sondrio) and who were already working in Ticino, Graubünden or Valais (in Ticino or Valais only for the municipalities of Brescia and Sondrio) between 31 December 2018 and 17 July 2023 may have tax withheld at source as new cross-border workers, under tariffs R, S, T or U. Article 6 of this decree gives them, from the 2024 tax year, the option of an Italian substitute tax equal to 25% of the tax paid in Switzerland, which replaces IRPEF and the surcharges and no longer allows the Swiss tax to be deducted. Other new cross-border workers are not entitled to it.

6. Which exchange rate for declaring a salary in francs in Italy?

The reference rate for the day on which you received each salary payment. The instructions for the 730 return provide that income in currencies outside the euro area is converted at the indicative reference rate for the day it was received, or for the closest preceding day; if no rate was set on those days, the average rate for the month is used. The rates are published by the Banca d'Italia. For salaries, there is no single annual rate set by the administration.

In practice, keep the statements showing the date of each salary payment in francs: they are what allow you to find the applicable rate for each month. The conversion you then make to pay your expenses in euros is a separate operation: it does not change the amount to be declared, but it determines how many euros you actually have left.

A salary in francs, rent, a loan and, for a new cross-border worker, Italian tax in euros: the conversion comes round every month. A bank that converts the salary on receipt applies its own rate, on a date you do not choose. ibani is a Geneva-based financial intermediary affiliated with SO-FIT, a self-regulatory organisation (SRO), and not a bank: your francs are converted at the market rate, plus a margin of 0.40% to 0.15% depending on the amount, then transferred to your euro account. The day's rate can be followed on our CHF-EUR converter, and our service for cross-border workers page presents the offer.

7. What happens if you are not a cross-border worker within the meaning of the agreement?

Neither the regime for existing nor the one for new cross-border workers applies: your salary comes under the 1976 double taxation convention. This is the case if you live in a municipality outside the 20 km zone, if you work in a canton other than Ticino, Graubünden or Valais, or if you exceed, in the year, the 45 days of non-return for work reasons.

Outside the agreement, Switzerland taxes the salary for work carried out on its territory under Article 15 of the convention of 9 March 1976, and Italy taxes it too, deducting the Swiss tax. According to the Agenzia delle Entrate, when only part of the salary enters Italian taxable income, because of the allowance, the tax credit is reduced in the same proportion. An Italian resident who stays in Switzerland during the week does not meet the daily commute condition: they are entitled neither to cross-border worker status nor to the allowance.

Exceeding the 45 days only counts for the year concerned. For an existing cross-border worker, the FTA accepts that a cross-border worker who left the 20 km zone during the 2018-2023 period and then returned keeps the transitional regime; no text expressly deals with the case of a year in which the limit is exceeded. Have your situation confirmed in writing by the tax administration of the canton of employment before a year at risk.

8. Who has to pay the “tassa sulla salute”?

As a general rule, not new cross-border workers: the contribution targets existing cross-border workers who have chosen Italian health insurance, residents of Italy who work and stay in Switzerland while using the Italian health service, and their dependants. The Italian budget law for 2024 (Law no. 213 of 30 December 2023, Article 1, paragraphs 237 to 239) provides for a contribution to the national health service, paid to the region of residence. Exception: cross-border workers who opt for the 25% substitute tax (section 5) are subject to it in all cases; they may deduct 20% of the contribution paid from this substitute tax.

• Amount: between 3% and 6% of the net salary received in Switzerland, set each year by the region according to income and family responsibilities, with a minimum of 30 euros and a maximum of 200 euros per month worked, amounts that may be doubled in the event of failure to pay or to declare.
• Implementing decree: the decree of 14 November 2025, published in the Gazzetta Ufficiale on 18 December 2025, leaves it to the regions and the autonomous province of Bolzano to set the rate through their own acts, with an annual payment.
• Implementation: as at 23 October 2026, we have found no published regional act setting the rate or the payment arrangements. On 15 June 2026, the Federal Council stated, in reply to a question from National Councillor Piero Marchesi, that the contribution had not yet been introduced.

The Federal Council considers it compatible with the double taxation convention and the agreement as long as its proceeds are earmarked for a specific purpose, but takes the view that blocking the financial compensation paid to the Italian municipalities, as envisaged by Ticino, would breach the agreement; the canton of Ticino disputes the contribution. If you are an existing cross-border worker and have opted for the Italian health service, keep an eye on communications from your region of residence.

9. What should you check on your payslip and over the year?

The tariff code, proof of your category, your municipality and your two annual counters: a category error repeats itself every month and cannot be corrected by a subsequent ordinary assessment.

• The tariff code: A, B, C or H for an existing cross-border worker, R, S, T or U for a new one. An existing cross-border worker taxed under R would pay too little in Switzerland and their data would be wrongly sent to the Italian tax authorities; a new cross-border worker taxed under A would pay too much in Switzerland.
• Proof of your category: keep your salary certificates and payslips for the period from 31 December 2018 to 17 July 2023, even from a short job. They are what prove existing cross-border worker status when you change employer.
• Your municipality of residence: before moving, check that it appears in the annex to the mutual agreement of 22 December 2023.
• Your counters: 45 days of non-return for work reasons and 25% telework, two separate caps to track over the year.
• For a new cross-border worker: the salary certificate and the withholding tax certificate for the Italian tax return, and the salary payment dates for the conversion into euros.

10. Frequently asked questions