Tax update for 2024 – cross-border commuter agreement with Italy and more

Progress on Switzerland’s cross-border commuter agreement with Italy – an update

Three mutual agreements have been published since my last blog https://www.zulaufgmbh.ch/en/outline-of-the-future-and-retroactive-agreement-on-teleworking-for-cross-border-commuters-in-the-area-of-taxes-between-switzerland-and-italy/ and the three cantons concerned – Graubünden, Ticino and Valais – have published various explanatory notes.

Two of the mutual agreements include the teleworking solution with retroactive effect from 1 February 2023 and 1 January 2024.

Link to the mutual agreement on teleworking 2024 and 2025 for cross-border commuters subject to tax law with validity from 1 January 2024: https://www.estv.admin.ch/dam/estv/de/dokumente/international/laender/int-laender-it-dba-aa-2024.pdf.download.pdf/int-laender-it-dba-aa-2024.pdf

Link to the mutual agreement on retroactive teleworking since 1 February 2023 for old cross-border commuters: https://www.estv.admin.ch/dam/estv/de/dokumente/international/laender/int-laender-it-dba-aa-2023.pdf.download.pdf/int-laender-it-dba-aa-2023.pdf

The details have already been published in the blog dated 13 November 2023. The mutual agreements on teleworking do not contain any substantial new details compared to the published letter of intent dated 10 November 2023.

On 22 December 2023, the SIF published a memorandum of understanding listing the municipalities in the 20 km zone for the application of the new cross-border commuter agreement. For employers in Switzerland, this is Appendix B with pages 10 to 20 of the Memorandum of Understanding. The communes are to be applied from 1.1.2024, namely for the old cross-border commuters in accordance with the agreement of 9.3.1976 and the new cross-border commuters in accordance with the agreement of 23 December 2020.
https://www.estv.admin.ch/dam/estv/de/dokumente/international/laender/int-laender-it-dba-aa-20231222.pdf.download.pdf/int-laender-it-dba-aa-20231222.pdf

It should be noted that these municipalities are applicable to employers in all three cantons of Graubünden, Ticino and Valais. Theoretically, someone from Domodossola could therefore take up a job in the canton of Graubünden. Although this municipality is on the list, it is unlikely that this is a genuine cross-border commuter because the distance and thus the daily return home is probably unreasonable. This means that companies in the three cantons will not only have to deal with the list of municipalities, but also with the issue of the daily commute to and from home. There is currently no official distance or time regarding the reasonableness of the journey to work, as contained in the CH-F (max. 1.5 hours or 110 km per journey) and CH-D (max. 1.5 hours or 100 km per journey) agreements.

In addition, the companies themselves must organise how they check whether a genuine cross-border commuter loses the status during the calendar year and is to be treated as a non-genuine cross-border commuter. According to verbal exchanges with the authorities, these are the following situations:

  • There is currently no special form provided by the FTA for the 45 work-related non-return days. Companies will therefore have to organise how they count and record these themselves. Teleworking days are not counted as work-related non-return days.
  • Teleworking must be carried out at the normal place of residence in the 20km zone for this to be considered teleworking within the meaning of the mutual agreement of 28 November 2023.
  • Companies must organise themselves how the 25% teleworking limit per calendar year is monitored so that it is not exceeded. There are currently no plans to automatically exchange this information with Italy.

 

The three cantons have a great deal of flexibility in implementing the regulations. It is therefore essential to consult the instructions and forms of the respective cantons. For example, the canton of Ticino has created a form that employers should use for old cross-border commuters: https://www4.ti.ch/fileadmin/DFE/DC/DOC-IF/nuovo_accordo/1A_Modulo_Vecchio_Frontaliere.pdf . The preparation of data for the automatic exchange of information is carried out manually or automatically in the canton of Ticino, for example, depending on the initial situation and payroll accounting version.

Addendum: On 19 January 2024, the FTA published the list of municipalities in the form of an Excel sheet: https://www.estv.admin.ch/dam/estv/de/dokumente/qst/20231222-comuni-italiani-nei-20-km.xlsx.download.xlsx/20231222-comuni-italiani-nei-20-km.xlsx

 

The guidelines for the 2024 salary certificate with the associated FAQs were published on 21 December 2023  (available in German, French and Italian): https://www.estv.admin.ch/estv/de/home/direkte-bundessteuer/lohnausweis.html#-2001549595 . I will outline some aspects in a separate blog.

 

We would like to wish all our readers a happy festive season and a prosperous 2024!

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