Italy announces new tax on people who cross-border work in Switzerland

In a bid to invest more money into their healthcare system, the Italian government is planning to implement a new tax on those who live in Italy but work in Switzerland, a new draft budget has suggested. Those with Swiss cross-border permits could be forced to pay up to 6 percent of their salary towards the new levy.

Special tax proposed for cross-border workers in Ticino

In the first draft of the Italian budget for 2024, the government has included a clause that would see workers who commute over the border to Switzerland pay a special tax. This would only apply to those who started working across the border before July 17, 2023 - the date when the latest cross-border agreement between Switzerland and Italy came into force.

Article 49 states that cross-border workers under the old agreement must pay between 3 to 6 percent of their net wages to Italy on top of the Swiss taxes they already have to pay on their working hours in the alpine nation. While it will be up to the border regions of Aosta, Piedmont, Lombardy and Trentino to decide exactly how much the rate would be, at its most extreme the policy would see someone on a monthly salary of 4.000 francs pay an extra 240 francs a month. 

Italian government to use the tax to raise doctor wages

Swiss newspaper Watson explained that the policy is designed to answer calls from healthcare providers in the border regions, which are under pressure to maintain staffing levels. Health officials explained that most doctors and nurses in the region choose to work in Ticino, benefiting from lower taxes, a much higher salary and a strong Swiss franc. According to the latest estimates, between 400 and 500 healthcare workers are urgently required in the cities of Como and Varese alone. 

With the change, the Italian media expects 110 million euros a year to become available, which should be able to increase wages in the region by 750 euros a month on average. Supporters argue that the policy is fair, given that Italians pay an average of 21 percent of their incomes to support health services, and cross-border workers can choose to use Italian healthcare and do not have to take out basic Swiss health insurance.

Critics call the tax plan a distraction

However, those within Italy have criticised the idea, with Watson reporting that a number of trade unions have called for the article to be deleted. Senator Alessandro Alfieri from the Democratic Party (CD) told La Regione that the Italian government’s plan, crafted by Prime Minister Giorgia Meloni, is a “mess” and could violate the country's existing agreements with the Swiss government as it leads to double taxation.

His CD colleague, Toni Riccardi, said the idea amounted to “theft”. He concluded that the policy’s likely purpose is to distract and shift the blame for failures in the Italian healthcare system from the government to cross-border workers.

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