Contribution to border municipalities: the Ministry of Economy sets the criteria

The Ministry of Economy and Finance has issued the decree of September 17, 2026, which regulates the terms and methods for determining the state contribution to Italian border municipalities, published in the Official Gazette of the Italian Republic, General Series no. 240 of October 15, 2026, page 38, with official reference 26A05401. The measure, signed by Minister Giorgetti, was registered by the Court of Auditors on October 6, 2026 (reg. no. 1228).

The regulatory framework

The decree implements Art. 10, paragraph 5, of Law no. 83 of June 13, 2023, which ratifies the agreement between Italy and the Swiss Confederation of December 23, 2020, on the taxation of cross-border workers. Art. 9 of the agreement provides, until the fiscal year ending December 31, 2033, for the payment by the Cantons of Graubünden, Ticino, and Valais of a quota equal to 40 percent of the gross amount of the salaries of Italian cross-border workers, as compensation for the expenses incurred by the municipalities of residence.

• Art. 10, paragraphs 1 and 2, Law no. 83/2023: state contribution to border municipalities during the transitional period and guarantee of the same level of funding thereafter.
• Art. 10, paragraph 3: establishment of a specific fund in the budget forecast of the Ministry of Economy and Finance.
• Art. 10, paragraph 6: possibility of using the sums for current expenditure up to a maximum limit of 50 percent.
• Art. 1, paragraph 99, Law no. 207 of December 30, 2024: extension of a portion of the contribution also to the municipalities indicated in Annex 1 to Decree-Law no. 113 of August 9, 2024, converted by Law no. 143 of October 7, 2024.
• Art. 3, paragraph 2, Decree-Law no. 162 of September 17, 2026: authentic interpretation of Art. 10, paragraph 5, of Law no. 83/2023.

Who receives the contribution

The contribution is limited to municipalities whose territory falls, in whole or in part, within the 20 km strip from the border line with the Cantons of Ticino, Graubünden, and Valais, listed in Annex B of the amicable procedure act between Switzerland and Italy concluded on December 22, 2023. The identification of cross-border workers is based on data communicated by the cantonal authorities and on data resulting from the application of Art. 6, paragraph 1, of Decree-Law no. 113/2024. No contribution is due for the years preceding the year of the fund’s establishment.

Calculation and distribution

The amount available in the fund is divided by the total number of identified cross-border workers, obtaining a per capita quota which, multiplied by the cross-border workers of each territory, determines the total quota transferred to the regions and the province.

• Piedmont, Aosta Valley, Autonomous Provinces of Trento and Bolzano: allocation to unions of municipalities and, in a similar measure, to border municipalities not belonging to unions.
• Lombardy: allocation to border municipalities in which cross-border workers represent at least 4 percent of the resident population (municipalities over 15,000 inhabitants) or at least 3 percent (municipalities under 15,000 inhabitants), according to ISTAT data published pursuant to art. 1, paragraph 236, of the law of 27 December 2017, n. 205.
• Residual quota in Lombardy: to the Lombardy Region, which may allocate it to mountain communities or provinces.

Use of funds and opinions

The sums must finance public works of general interest aimed at facilitating cross-border workers, with a preference for residential housing and public transport, prioritizing interventions of interest to multiple municipalities. Up to 50 percent may be used for current expenditure, primarily to compensate for the socio-economic effects of existing corporate crises in the territory.

The following expressed a favorable opinion:

• Lombardy Region, deliberation n. XII/6643 of 3 August 2026;
• Piedmont Region, deliberation n. 7-2969/2026/XII of 7 August 2026;
• Aosta Valley Region, deliberation n. 896 of 7 August 2026;
• Autonomous Province of Bolzano, deliberation n. 661 of 28 August 2026.

The decree operationalizes the compensation mechanism provided for by the Italian-Swiss agreement: for border municipalities, this means explicit distribution criteria and resources transferred via regions and provinces, while for cross-border workers and their communities, the expected effect is the funding of housing and public transport, in addition to the possibility of covering part of the social burdens linked to local corporate crises with the current quota.

Source: Official Gazette of the Italian Republic, General Series n. 240 of 15 October 2026, page 38 — Decree of the Minister of Economy and Finance 17 September 2026, “Terms and procedures for the determination of the contribution of Italian border municipalities” (26A05401).