Cross-Border Commuters and Swiss GmbHs (SAGL): A Still Open Conflict of Income Tax Qualification

The Order of Chartered Accountants of Milan recently published a detailed analysis regarding the controls carried out by the Italian Guardia di Finanza (GdF) on cross-border commuters who are also shareholders of Swiss Limited Liability Companies (GmbHs/SAGLs). The aim of these investigations is to reclassify employment income as assimilated income, based on the presumption that the requirement of external direction is lacking.

This assessment approach entails significant tax and sanctionary consequences for cross-border commuters, including potential criminal implications. However, the interpretation of the Italian Authorities does not fully consider Swiss and international regulations on the matter.

It is crucial to understand the complex distinctions between the roles of shareholder, director, and employee, as recognized by jurisprudence. Only careful planning and accurate defense can effectively counter Italian challenges and prevent the risk of double taxation