All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Swiss-Italian travel agreement settles cross-border tax questions

Sponsored by Sponsored_Firms_deloitte.png
eric-prouzet-l-tsvvmplum-unsplash.jpg

David Wigersma and Giuseppe Sarno of Deloitte Switzerland explore how the governments of Switzerland and Italy have clarified the tax rules for cross-border workers affected by the coronavirus pandemic.

In July, Switzerland and Italy concluded a provisional mutual agreement, which settles the question of taxation of their respective cross-border workers* who are working from home. For the period from February until the end of June, and then to be renewable at the end of each month, cross-border commuters working from home will be deemed for tax purposes to have travelled physically to their usual place of work.



Due to travel restrictions by the Swiss and Italian governments, many cross-border workers who reside in Italy and work in Switzerland, or vice versa, have been unable to get to their ordinary place of work. This has raised the question whether this will result in a change in the tax regime applicable to them.



The agreement between Switzerland and Italy about cross-border workers who are forced to work from home due to the travel measures taken by the two governments, which applies on an exceptional and provisional basis, clarifies the tax situation. In substance, cross-border commuters working from home continue to benefit from the same tax treatment as if they had physically gone to their usual place of work. The same treatment also applies to the cross-border workers who have spent several consecutive days in their place of work without returning each day to their place of residence.



The provisions of this agreement have effect from February 24 2020 and up to and including June 30 2020. It is then renewable at the end of each month, and will eventually cease to have effect when the two states have ended their travel warnings and restrictions.  



This agreement reflects the recommendations made by the OECD and is a pragmatic approach,  which should reassure cross-border commuters and contribute to legal clarity.



*Cross-border workers are those who are resident in a municipality within 20 kilometres from the borders of Canton Ticino, Grisons and Valais, where the individuals commute to render their services.



David Wigersma

E: dwigersma@deloitte.ch



Giuseppe Sarno

E: gsarno@deloitte.ch



More from across our site

Japan reports a windfall from all types of taxes after the government revised its stimulus package. This could lead to greater corporate tax incentives for businesses.
Sources at Netflix, the European Commission and elsewhere consider the impact of incoming legislation to regulate tax advice in the EU – if it ever comes to pass.
This week European Commission officials consider legal loopholes to secure minimum corporate taxation, while Cisco and Microsoft shareholders call for tax transparency.
The fast-food company’s tax settlement with French authorities strengthens the need for businesses to review their TP arrangements and documentation.
The full ALP model will be adopted through a new TP regime, which is set to boost the country’s investments and tax certainty.
Tax professionals have called on the UK government to reconsider its online sales tax as it would affect the economy at the worst time.
Tax professionals have called on companies to act urgently to meet e-invoicing compliance targets as the EU plans to ramp up digitisation.
In the wake of India’s ambitious 25-year plan for economic growth, ITR has partnered with leading tax commentators to discuss what the future will look like for India and for the rest of the world.
But experts cast doubt on HMRC's data and believe COVID-19 would have increased the revenue shortfall.
EY’s plan to separate its auditing and consulting businesses might lessen scrutiny from global regulators, but the brand identity could suffer, say sources.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree