Cross-border workers: employer outside the border area (cross-border guide)
Italy's Revenue Agency (ruling 126/2026) clarifies that if the work is performed in the Italian border area, an employer located outside that zone does not bar the cross-border tax regime.
Contesto
In brief - Italy's Revenue Agency (Agenzia delle Entrate), in ruling no. 126/2026, clarifies the scope of the new Italy-Switzerland agreement on cross-border workers - An employer based outside the border area does not, in itself, rule out the treaty regime - What matters is where the work is actually performed, not where the company is registered ## Key facts - Document: Ruling no. 126 of 2026, Agenzia delle Entrate - Case: a worker resident in a border municipality of Canton Ticino, employed as a pharmaceutical sales representative - Employer: an Italian company with its registered office in Veneto; work performed entirely in Lombardy - Conclusion: the employer's location outside the border area does not bar the agreement, provided the employer is tax-resident in Italy In ruling no. 126 of 2026, Italy's Revenue Agency clarifies that, for the purposes of the new tax agreement between Italy and Switzerland on cross-border workers, the fact that the employer's office is located outside the border area does not, in itself, prevent access to the treaty regime, provided the work is performed entirely within the Italian border area and all the other requirements set out in the agreement are met. The ruling stems from a request submitted by a taxpayer who is tax-resident in Canton Ticino, in a Swiss border municipality, employed as a pharmaceutical sales representative by an Italian company with its registered office in Veneto. The work, however, is carried out entirely in Lombardy. Hence the interpretive question: whether the location of the employer's office outside the Italian border belt could preclude the application of the Agreement between the Italian Republic and the Swiss Confederation on the taxation of cross-border workers, signed on 23 December 2020 and applica...
Dettagli operativi
What the Revenue Agency clarified In giving its opinion, the tax authority first notes that verifying the taxpayer's tax residence and the actual existence of the factual requirements for cross-border-worker status is not the subject of the ruling: these circumstances are taken as assumptions that cannot be verified in that setting, and the answer is limited to clarifying the interpretive question raised. The interpretation rests on the literal wording of Article 2, letter b), of the Agreement. That provision requires the worker to perform the employed activity in the border area of the other contracting State and the employer merely to be resident in that State, without requiring that the employer's office also be located in the same geographical area. For Italian territory, the border area comprises the Regions of Lombardy, Piedmont and Aosta Valley, as well as the Autonomous Province of Bolzano. It follows that the employer's office may legitimately be located even outside the border belt – as in the case examined, in Veneto – provided the employer is tax-resident in Italy and the work is actually performed in the border area identified by the Agreement. The location of the company's office, therefore, is not an obstacle to the application of the treaty regime. ## How the new cross-border workers are taxed The new Agreement also extended its personal scope to Swiss-resident cross-border workers and introduced a concurrent taxation regime: the State where the work is performed levies a withholding tax of up to 80% of what is ordinarily due, while the State of residence taxes the income in full, eliminating double taxation under the treaty rules. Understanding the net impact of these rules on your salary is essential: for an up-to-date estimate you can use the net c...
Punti chiave
The requirements of Article 2 of the Agreement The benefit remains subject to all the further conditions required by Article 2 of the Agreement, including the worker's residence in a municipality located within 20 kilometres of the border, the performance of the activity in the border area and, in principle, a daily return to the main home in the State of residence. The ruling thus confirms an interpretation that adheres to the literal wording of the treaty, ruling out restrictive readings based solely on the location of the employer's office and offering an important clarification for the so-called "reverse cross-border workers": those employed by Italian companies whose registered office is outside the border area but who operate steadily in border territories. If you are looking for a job in the border area or want to check the terms of your contract, discover the jobs in Ticino updated daily by companies that hire cross-border workers. Source: Agenzia delle Entrate, ruling no. 126 of 2026. Article by Dott. Samuele Valente.
Punti chiave
[{"q":"Does an employer based outside the border area cause the loss of the cross-border worker regime?","a":"No. According to Italian Revenue Agency ruling 126/2026, the employer may also be located outside the border area, provided the employer is tax-resident in Italy and the work is performed in the Italian border area."},{"q":"Which Italian regions make up the border area?","a":"For Italy, the border area comprises the Regions of Lombardy, Piedmont and Aosta Valley, plus the Autonomous Province of Bolzano."},{"q":"What really counts for applying the Italy-Switzerland cross-border agreement?","a":"What counts is where the worker actually performs the activity (a border area), residence in a municipality within 20 km of the border, the employer's tax residence in the other State, and the daily return to the main home."}]
Frequently Asked Questions
- Does an employer based outside the border area cause the loss of the cross-border worker regime?
- No. According to Italian Revenue Agency ruling 126/2026, the employer may also be located outside the border area, provided the employer is tax-resident in Italy and the work is performed in the Italian border area.
- Which Italian regions make up the border area?
- For Italy, the border area comprises the Regions of Lombardy, Piedmont and Aosta Valley, plus the Autonomous Province of Bolzano.
- What really counts for applying the Italy-Switzerland cross-border agreement?
- What counts is where the worker actually performs the activity (a border area), residence in a municipality within 20 km of the border, the employer's tax residence in the other State, and the daily return to the main home.