By Petra D’Andrea – Department of Global Mobility
The Omnibus Decree 113/2024, which was converted with amendments by Law No. 143 of October 7, 2024, introduced adjustments to the tax regulations applicable to frontier workers with Switzerland.
Following the latest amendments to the original 1974 Agreement, a differentiated regime had been created: on the one hand, frontier workers who were already employed in Switzerland before January 1, 2024, with the possibility of having exclusive taxation in Switzerland; on the other hand, workers hired after that date, with the application of taxation in Switzerland for 80 percent of their employment income and Italy’s option to tax the remaining part of the income (with recognition of tax credit).
In addition, the legislation did not provide a particular definition of “border municipality”, which led to many critical issues.
What’s new?
The Omnibus Decree provided the possibility for frontier workers in Switzerland to pay an Italian substitute tax on IRPEF and additional taxes, which is equivalent to 25 percent of the taxes they have already paid in Switzerland on their salaries (not on earned income), with no possibility of offsetting taxes paid abroad.
The Omnibus Decree also standardized the definition of “border municipality” between Italy and Switzerland, and also provided for a defined list of affected municipalities.
The new taxation modalities will affect only those workers who will take on the status of border commune from the entry into force of the corrective, while all others are guaranteed to maintain the previous regime through an ad hoc transitional regime.
What to do?
The taxpayer must exercise the option in the tax return.
Pay attention to the consequences in the case of telecommuting and smart working.
Contact us
Bacciardi Partners‘ professionals in the Global Mobility Department are available to evaluate the opportunity to take advantage of the new option.
We invite you to contact us directly at +39 0721 371139 or via email at segreteria@bacciardistudiolegale.it for more information or clarifications.