THE NEW AGREEMENT BETWEEN SWITZERLAND AND ITALY ON THE TAXATION OF FRONTIER WORKERS WILL BE IN FORCE FROM 2023

On January 1, 2023, the new agreement between Switzerland and Italy on the taxation of frontier workers is likely to come into force.

The Italian government has approved the bill for the ratification and execution of the new agreement. Switzerland may in the future tax the income from employment deriving from the activity carried out on its territory up to a limit of 80% and the taxation will have to be applied at source. The most important change undoubtedly concerns the disappearance of the 20 km band within which the Italian worker residing there could pay taxes only in Switzerland (taxation at source), without declaring or taxing obligations in Italy. From 2023, in fact, Italy will also be able to tax frontier workers as fiscally resident subjects, but will have to eliminate double taxation through the tax credit mechanism. In addition, Switzerland will annually communicate the data relating to the taxation of the Italian frontier worker to the Italian Revenue Agency.

Our staff is available for any clarification.