TAX CREDIT IN ITALY FOR TAXES PAID IN SWITZERLAND

The Court of Cassation (ordinance 12921 filed on 12 May 2021) has established that the employer fiscally resident in Italy and who has stayed in Switzerland for more than 183 days during the year, is also subject to taxation in Italy as for the worldwide taxation principle but has the right to deduct from his net income tax due in Italy the employment income taxes paid outright in Switzerland within the limits of the ratio between foreign income and total income. With this principle, the Court of Cassation quashed the sentence of the Ctr Piemonte which erroneously considered due the full reimbursement of the taxes declared in Italy.

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