The 2020 Italy-Switzerland Agreement on the Taxation of Frontier Workers (cross-border guide)
The Italy-Switzerland Agreement of 2020 introduces a new tax regime for frontier workers, replacing the 1974 framework. The analysis evaluates the
Context
A. Introduction, research question and method I. Purpose and analytical approach This article provides a critical analysis, article by article, of the Italy-Switzerland Agreement of 23 December 2020 on the taxation of cross-border workers, read together with its Additional Protocol and subsequent provisions on telework, and framed in the Italy-Switzerland double taxation agreement (DTA) of 1976. It evaluates the legal meaning of each provision, the practical effects for cross-border workers, systemic coherence with national and international law and proposes targeted improvements. The Agreement replaces the 1974 framework and introduces a capped withholding tax model for "new" cross-border workers, with a transitional cohort remaining taxed exclusively in Switzerland and a 40% compensation to Italian border municipalities until the 2033 tax year. The Agreement operates against the backdrop of the DTA (attribution under Article 15, elimination of double taxation under Article 24, non-discrimination under Article 25, MAP pursuant to Article 26), to which the Agreement makes multiple cross-references. The Italian ratification law (Law No. 83/2023) and subsequent legislative/practical measures implement the regime at national level, including bridging rules for teleworking in 2023 and, from 1 January 2024, a 25% adjustment for teleworking under permanent regime pending ratification of the protocol. 1 2 II. Method and sources The commentary bases each factual proposition on the primary text of the treatise (using paragraph indicators) and on specialized sources. For the provisions of the Agreement, the citations refer to the authenticated text provided by the parties (e.g. the 80% limit of Article 3, the transitional regime of Article 9). National implementation and benefits for teleworking are cited in the Italian ratification law and in official press releases describing the 25% quota and its legislative vehicle for provisional application. Comparative insights are based on recognized accounts of the France-Luxembourg and Belgium-Luxembourg daily tolerance regimes (34 days) and the absence of similar telework tolerance for Germany-France, as reported in authoritative documents. 3 Where open policy issues remain (for example, the counting rules for the 45-day no-return tolerance against the 25% telework quota), the analysis identifies them and places solutions in the Joint Commission/MAP toolkit. B. Articles 1–2: Personal scope, border zone and definition of cross-border worker I. Personal scope and territorial scope Article 1 limits the Agreement to persons resident in one State who work as cross-border workers in the border zone of the other. Article 2 defines "border area" as Lombardy, Piedmont, Valle d'Aosta and the Autonomous Province of Bolzano on the Italian side and the Cantons of Grisons, Ticino and Valais on the Swiss side. This bilateral mapping ensures that the regime truly addresses high-density cross-border labor markets and avoids overly inclusive classifications that could encourage forum shopping. II. The three-part definition of a cross-border worker Article 2(b) crystallises a three-part test: (i) residence in a municipality whose territory lies, in whole or in part, within 20 km of the border; (ii) employment in the border area of the other State for a local/PE/fixed base employer; and (iii) a principle of daily return to the worker's main domicile in the State of residence. The competent authorities are responsible for establishing how the 20 km conditions and daily return are applied by mutual agreement (MAP-style cooperation at administrative level). The Additional Protocol refines this aspect with an explicit tolerance: up to 45 days per calendar year of non-return for professional reasons, excluding holidays and illness. III. Critical evaluation and suggested improvements The 20 km municipal test is a rigorous spatial threshold that reduces ambiguity but requires precise proof of the municipal boundary; a joint administrative guideline on acceptable evidence (register extracts, GIS overlays) would increase certainty. The hybrid "daily return in principle" + 45 day tolerance reasonably recognizes real-world mobility, but is framed in "days" rather than "time/percentage", as later adopted by telework benefits. Harmonization of the unit of account and clarification of fractional days, overnight stays between consecutive shifts and business trips abroad would avoid non-uniform application. The requirement that the work be carried out in the "border area" (not simply anywhere in the other state) fits the concept of the border and limits treaty shopping; however, payroll systems should flag workplaces to distinguish work in the border zone from assignments outside the border zone for status verification and withholding purposes. C. Article 3: Allocation, 80% withholding limit, safeguard and exclusive withholding I. Aligned and differentiated allocation with respect to Article 15 of the OECD Article 3(1) assigns primary taxing rights to the State of work ("where the work is carried out"), in line with Article 15 of the OECD Model, while imposing a quantitative limit: the tax in the State of work cannot exceed 80% of the personal income tax that would apply in the workplace, including local income taxes. The State of residence also taxes and must eliminate double taxation. This limit is not found in the OECD Model; this is a tailor-made calibration to share tax revenue, while limiting the burden at source for "new" cross-border workers. Contemporary summaries of the Accord's "ordinary" regime reflect this model of 80% cap + taxation in the country of residence, contrasting it with the transitional "Swiss exclusive" regime for the pre-existing cohort. 4 II. The safeguard for Italian residents and exclusive withholding Article 3(2) ensures that the total tax on cross-border workers resident in Italy is not less than that which would have been applied under the 1974 agreement: a non-erosion clause that preserves Italy's basic revenue expectations. Article 3(3) provides that the taxation of cross-border workers in the State of employment shall be carried out exclusively by withholding tax, excluding any alternative method for the purposes of the Agreement. The Additional Protocol clarifies that “personal income tax” includes ordinary national and local levels applicable to non-residents (IRPEF and regional/municipal surcharges in Italy; federal, cantonal and municipal taxes (with a cantonal average multiplier) in Switzerland), anchoring the cap benchmark to real-world composite burdens. III. Practical implications and administrative mechanisms For Switzerland as an employment state, payroll must calculate withholdings that do not exceed 80% of the applicable composite burden; this requires canton-specific rate tables and an average multiplier methodology, as set out in the Protocol. For Italy as the State of residence, the ordinary method of credit or exemption applies pursuant to Article 24 of the DTA (Article 5 of the Agreement), but the practice must take into account the ceiling to avoid excessive credit or uncompensated double taxation. The administrative guidelines should specify the basis of the ceiling (income before or after the deduction), the interaction with personal deductions and the documentation to be attached to Italian declarations to substantiate the foreign withholding, in a manner consistent with the exclusive collection at source rule. IV. Criticism of the policy The 80% limit is defensible as an equity tool, but it introduces a level of computational complexity for employers, especially when personal circumstances influence the rates. A joint technical note, approved by the commission, could standardize approximation methods (e.g., average non-resident scales by canton/municipality) and mitigate the employer's risk of under- or over-withholding. The exclusive withholding rule is efficient for compliance, but relies heavily on cross-border data quality; its success depends on the data pathways operating in accordance with the specifications of Article 7. D. Article 4: Non-discrimination I. Regulatory design Article 4 prohibits any "different or more burdensome" taxation for cross-border workers than those falling within the definition of LAC and prohibits discrimination based on the definition of cross-border worker (including length of stay or frequency of return). This complements the non-discrimination standard of Article 25 DTA. II. Critical Perspective The breadth of the provision, which explicitly includes “length of stay” and “frequency of return,” is a deliberate response to potential unequal treatment between workers with different work patterns (e.g., compressed weeks, teleworking days). It should guide administrative practice: where two workers satisfy Article 2(b), their tax treatment should not diverge because one bundles days on site and the other distributes them evenly. To avoid cohort-based inequalities, monitoring should ensure that “new” cross-border workers compared to “old” cross-border workers do not suffer unjustified disparate burdens beyond what is explicitly foreseen by the transition. E. Article 5: Elimination of double taxation — general rule and Swiss four-fifths I. General alignment with Article 24 of the DTA The State of residence eliminates double taxation pursuant to Article 24 of the DTA. This preserves the systemic integrity of the CDI and avoids excluding cross-border workers from the general relief framework. II. Switzerland's four-fifths reduction Article 5(2) articulates a Swiss mechanism: Switzerland, when determining the tax base, takes into account withholding taxes under Article 3(1), reducing gross earned income by four-fifths (effectively a taxable share of 20% for exemption purposes) for cross-border workers resident in Switzerland. This conceptually mirrors the 80% source limit, improving symmetry and reducing the residual risk of double taxation. III. Implementation Note Given Italy's credit practice and Switzerland's basis reduction method, consistent cross-certification of withholdings and standard forms would reduce mismatches. The joint commission may approve a single bilingual certificate form certifying the gross income, social security contributions and the exact withholding tax under the cap regime. F. Articles 6–7: Governance (Joint Commission/MAP) and administrative cooperation I. Joint Commission and access to the MAP Article 6 requires best efforts to resolve disputes by mutual agreement and authorizes a Joint Commission to meet at least once a year; any State may request a meeting, which must be convened within three months. Taxpayers retain access to the MAP under Article 26 of the DTA where the measures result in taxation that does not comply with the Agreement. The Additional Protocol specifies the composition of the commission (competent central authorities plus regional/cantonal tax authorities) and explicitly tasks it with annually verifying correct application and evaluating whether the total revenue is in line with the distribution rules, based on aggregate statistics. II. Administrative cooperation and March 20 deadline Article 7 builds a comprehensive electronic information channel: by March 20 of the year following the fiscal year, the working State provides identification data, residence details, tax codes, gross salary, mandatory social contributions, total withholding tax and employer identifiers; the methods must be established by mutual agreement, with direct transmissions from the canton to the Revenue Agency for cross-border workers resident in Italy and reciprocal flows from Italy to the Federal Tax Administration for cross-border workers resident in Switzerland. Correct communications are mandatory in case of errors, late employer data or incomplete periods. Confidentiality provisions limit use to assessment, collections, procedures and appeals, with public disclosure limited to judicial settings; the use of employer identity data is limited to the taxation of employment income. III. Critical Assessment The annual deadline and direct sub-federal channels are ambitious and, if met, materially reduce credit/arbitrage disputes. The Agreement's data architecture supported Italy's removal of Switzerland from the 1999 ministerial list of privileged regimes upon ratification, as recognized by case law and legislative notes, thus integrating treaty cooperation with national anti-tax avoidance frameworks. 5 The implementation should adopt shared data schemas (e.g., standard XML/JSON fields), SLAs for fixes, and a joint incident log reviewed by the commission to ensure accountability and continuous improvement. <!-- --> G. Articles 8–10: Entry into force, transitional regime and review clause I. Temporal regime and replacement Article 8 provides for entry into force upon receipt of the last diplomatic notification of completion of national procedures, with application starting from 1 January of the following calendar year; replaces the 1974 Agreement, which continues to apply until the new text comes into force. Specialist summaries place the operational breakthrough in 2023 after ratification, with alignment of national measures thereafter. 6
Operational details
II. Transitional and anti-abuse exclusivity Article 9 maintains the exclusivity of Swiss taxation for cross-border workers resident in Italy who were active at the time of entry into force or between 31 December 2018 and that date. The Swiss border cantons annually pay 40% of the gross tax revenue (federal, cantonal and municipal) on these border salaries to the Italian border municipalities until the 2033 tax year, with a single transfer in CHF in the first half of the following year; the Italian authorities distribute the funds according to agreed criteria, based on cantonal statistics. The data exchange referred to in Article 7 does not apply to the transitional cohort. An anti-abuse channel allows one competent authority to report clear cases of abuse to the other, via the framework of Article 6 and Article 26 of the DTA, to establish appropriate tax treatment. The Additional Protocol clarifies the operational criteria: the existence of a withholding/notification to the canton is sufficient to establish transitional coverage; continuity is preserved despite interruptions in employment or changes of employer, provided that the conditions referred to in Article 2(b) continue to exist and the work remains in the Swiss border area. n. 83. Issued by the Revenue Agency. Part two. Tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n. 83 III. Five-yearly review Article 10 requires a review every five years, while the Additional Protocol requires the Commission to annually assess whether the total tax revenue collected corresponds to the distribution rules and to review the provisions on teleworking, if necessary. Publishing high-level dashboards on volumes, average charges, MAP cases, and correction rates would transform the review from a formality to an evidence-based policy lever. H. Teleworking: from emergency bridges to a lasting 25% rule I. Transitional emergency measure 2023 (40%) and legislative extensions In the wake of the disruptions caused by the pandemic and awaiting lasting rules, the Italian ratification law allowed cross-border workers (under the 1974 agreement) to consider the days of teleworking carried out in the State of residence up to 40% of working time between 1 February and 30 June 2023 as carried out in the other State, protecting the cross-border status and the distribution; subsequent legislative action extended the effect to December 31, 2023 for workers who were teleworking as of March 31, 2022. 7 This statutory bridge also replaced a previous, more restrictive administrative interpretation for that period. 8 II. From 1 January 2024: the stable 25% rule A bilateral declaration of intent (November 2023) and an amendment protocol signed in Rome and Bern (30 May/6 June 2024) have established a 25% tolerance for teleworking: cross-border workers can telework from their state of residence up to 25% of their working time without this affecting the allocation of taxing rights or on the status of cross-border workers; telework time up to the threshold is considered to be performed in the employer's state. 9 Pending the ratification and entry into force of this protocol, the Italian legislator has issued a provisional rule starting from 1 January 2024 which reflects the 25% tolerance for teleworking and considers such activity to be carried out in the other State for the purposes of Article 3, thus providing a national legal basis for the Italian part of the agreement relating to Italy. 10 The comments confirm the legislative bridge and its extension n. 83. Issued by the Revenue Agency. Part two. Tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n. 83 in 2025, if necessary, and note the alignment with the logic of the Additional Protocol that teleworking should not in itself redistribute taxing rights within the agreed quota. 11 12 III. Interaction with the 45-day tolerance The Accord's border definition tolerates up to 45 days of non-return for business reasons, a “day count” metric, while the adjustment for telework is a percentage of time metric. 13 In the absence of explicit coordination, a worker could meet both thresholds separately but produce divergent counting results (e.g., short days of teleworking versus full days of not returning for business trips). The Joint Commission should adopt a unified counting methodology: (i) define a “day” (e.g., any day with >50% of normal hours); (ii) specify whether teleworking hours are aggregated into daily equivalents for the 45 day tolerance; (iii) establish precedence where both measures apply. The Additional Protocol provided for telework consultations and interpretive solutions based on the MAP, providing the legal avenue for such standardization. IV. Risk Control and Taxpayer Experience The 25% share balances labor market flexibility with allocation certainty. Payroll systems must track telecommuting hours, store employer attestations, and generate standardized certificates for tax authorities to reconcile withholdings and credits. 14 For taxpayers, the coexistence of an 80% ceiling, a 25% telework quota and a 45-day grace period risks creating confusion. A bilingual guidance note, approved by the commission, should include scenarios 30/12/2024, n. 207 Explanatory and technical report to the law of 30 December 2024, n. 207 "State budget forecast for the financial year 2025 and multi-year budget for the three-year period 2025-2027.". Issued by the Chamber of Deputies. (e.g. compressed 12-hour shifts, alternating weeks, partial teleworking days) and a decision tree indicating when the assignment under Article 3 remains stable. I. Comparative perspective within the EU: model families and conclusions I. Daily tolerance regimes: France-Luxembourg and Belgium-Luxembourg France-Luxembourg and Belgium-Luxembourg have formalized 34-day annual tolerances for teleworking through administrative means (exchanges of letters/administrative agreements), allowing cross-border workers to work remotely from their State of residence for up to 34 days per year without changing their taxing rights or cross-border commuter status; these tolerances have been confirmed for 2024. 15 The “day counting” approach is verification-friendly and complements the presence principle of Article 15 of the OECD by creating a quantified “safe door” rather than introducing a percentage time threshold. II. Absence of tolerance: Germany-France In contrast, Germany-France did not introduce a specific tolerance for teleworking days in the treaty or subsequent administrative agreements; the assignment therefore follows the general physical presence logic of Article 15 and the treaty text, whereby any telework carried out in the State of residence typically results in those days being subject to taxation of the State of residence in the absence of a provision to the contrary. 16 This model is simple from a doctrinal point of view but less suitable for hybrid work models. III. Italy's emergency bilateral agreements during the COVID-19 pandemic During the pandemic, Italy concluded Article 15 administrative agreements with Austria (cross-border workers only) and with France and Switzerland (cross-border workers and employees), applied between March 2020 and dates in 2022/2023 to "sterilize" the effects of teleworking; Italy subsequently extended by law a limited cross-border teleworking bridge until 2023 for Italy-Switzerland relations. 17 This confirms the Parties' willingness to use administrative tools to avoid mechanical reallocation n. 83. Issued by the Revenue Agency. Part two. Tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n. 83 n. 83. Issued by the Revenue Agency. Part two. Tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n. 83 due to emergency teleworking, a practice that has evolved into the steady state of 25% Italy-Switzerland starting in 2024. 18 IV. Border clauses in Italy-France and Italy-Austria The Italian doctrinal summaries note that Italy-France and Italy-Austria present border clauses pursuant to Article 15, paragraph 4 (with definitions of "habitual" commuting and border zone), which historically emphasize daily return in Italian practice and without quantified tolerances of non-return or teleworking; pandemic-era relief was temporary and did not establish permanent forbearances. The Italy-Switzerland model differs with a codified tolerance of 45 days of non-return, a limit of 80% at source and an explicit and lasting quota of 25% teleworking. 19 V. Policy Lessons for Italy-Switzerland A hybrid metric that combines a percentage time share (25%) with a day counting cap (e.g. 34 days), as in Luxembourg's bilateral practice, would improve administrability for both employers and authorities, allowing clear daily log checks and simple payroll reporting. 20 Another lesson is the value of standardized certificates across schemes (income, withholdings, teleworking days), which minimize credit disputes under home state relief mechanisms. J. National interface and judicial method I. Italian implementation levers The ratification law (June 2023) and subsequent measures implemented: (i) the 40% teleworking bridge for cross-border workers in 2023, with an extension for those who worked teleworking from 31 March 2022 to 31 n. 83. Issued by the Revenue Agency. Part two. Tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n. 83 December 2023;21 (ii) from 1 January 2024, a legislative bridge to the 25% telework rule pending ratification of the Protocol, coupled with a presumption rule that such telework is carried out in the State of the Employer State of the Employer for the purposes of Article 3; 22 (iii) the removal of Switzerland from the 1999 "black list" following the ratification of the Agreement and its commitments on data exchange, as recognized in 2026 by the Supreme Court. 23 II. Judicial interpretative position The jurisprudence of the Italian Court of Cassation reiterates the primacy of the treaties on national law regarding attribution and relief, the canons of the Vienna Convention for the interpretation of bilateral provisions and the rule of physical presence for income from employment pursuant to Article 15 when no special clause applies; this approach underwrites a conservative attribution of telework in the absence of explicit tolerances, reinforcing the need for clear exclusions at the treaty level. The courts also echo the neutrality objectives of EU law in cross-border contexts, albeit in adjacent areas (e.g. interest taxation), indicating a general judicial sensitivity to double taxation avoidance and consistency in relief. K. Article-by-article conclusions, consistency checks and improvements I. Articles 1–2 (scope/definitions) Conclusion: The municipal criterion of 20 km and the daily return in principle plus the 45-day tolerance create an operationally precise border concept, more stringent than many comparators but flexibly mitigated for modern mobility. Improvements: A joint interpretative note should standardize the proof of residence, define the “day” for counting the 45 days, specify the treatment of partial days and consecutive overnight stays, and codify the acceptable evidence of the employer for the place of work in the border area. II. Article 3 (allocation/ceiling/withholding) n. 83. Issued by the Revenue Agency. Part two. Tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n. 83 Part one. Tax profiles of remote working (so-called smart working) Revenue Agency - Circular 08/18/2023, n. 25/E Tax profiles of remote working (so-called smart working) and tax regulations for cross-border workers. News introduced by the law of 13 June 2023 n. 83. Issued by the Revenue Agency. [Tax profiles of remote working (smart working) and tax regulations for cross-border workers]{.underline} edited by Giuseppe Salaniti – Labor consultant in Turin 30/12/2024, n. 207 Explanatory and technical report to the law of 30 December 2024, n. 207 "State budget forecast for the financial year 2025 and multi-year budget for the three-year period 2025-2027.". Issued by the Chamber of Deputies. Conclusion: The 80% withholding limit combined with concurrent taxation in the country of residence is a pragmatic device to balance refund claims in the country of origin and the country of residence, while the exclusive withholding rule improves compliance efficiency. Improvements: A bilateral technical memorandum on the calculation of the ceiling (rate tables, personal allowances, deductions), standardized withholding certificates and examples would reduce employer and taxpayer uncertainty.
Key points
III. Article 4 (non-discrimination) Conclusion: The clause's explicit protection against discrimination based on "length of stay"/"frequency of return" complements the logic of the ALC and prevents differential treatment of workers whose patterns differ within the limits of Article 2(b). Improvements: Indicators approved by the Commission should monitor actual tax burdens across cohorts and work patterns to prevent indirect discrimination. IV. Article 5 (Relief) Conclusion: The reduction of the Swiss base by four fifths reflects the 80% limit and offers a coherent relief path that reduces double taxation frictions. Improvements: Align home state credit mechanics with Swiss limited withholding certificates; publish a joint question and answer session on the sequence of relief under the cap. See Articles 6–7 (governance/cooperation) Conclusion: The Joint Commission and the 20 March data rail are the backbone of the Agreement, allowing for the application of the cap, the synchronization of benefits and the removal of existing anti-avoidance lists. 24 Improvements: The commission should adopt common data standards, an SLA for corrections, and a public (aggregated) annual report on the exchange's performance. YOU. Articles 8–10 (entry/transition/review) Conclusion: The transitional exclusivity (Swiss taxation only) for the 2018 entry cohort, plus 40% reimbursements until 2033, carefully preserves legitimate expectations and funds Italian municipalities, while the anti-abuse channel provides the necessary protections. Improvements: Publish annual statistics on the number of transitioning employees, reimbursements and any anti-abuse cases investigated by the competent authorities. VII. Telecommuting Conclusion: The 2023 40% bridge and 2024 25% enduring share reflect a measured acceptance of hybrid work, consistent with non-disruption of assignment and status; however, the interaction with the 45 day grace period has yet to be codified into the counting rules. 25 Improvements: adopt a dual metric (percentage + safe harbor based on day count) and integrate telework count into the 45 day register; publish FAQs at commission level for mixed scenarios (teleworking + travel). 26 L. Executive Summary (Policy Oriented) The Italy-Switzerland Agreement strikes a distinctive balance: work status taxation modulated by an 80% cap, a narrow border perimeter (including the 20km rule from the municipality and daily return in principle), a quantified tolerance of 45 days of no return, and a data-rich administrative cooperation ecosystem that supports both exemption and enforcement. The transitional exclusivity with 40% refunds maintains pre-existing expectations until 2033, while the 25% teleworking rule from 2024 modernizes the regime without upsetting allocation or status. 27 Compared to EU comparators, the model is more structured than the Germany-France one (no tolerance for teleworking) and more granular than the France-Luxembourg and Belgium-Luxembourg daily tolerance regimes (34 days), although it would benefit from adopting a complementary day counting metric for ease of testing. 28 Three implementation priorities emerge: (1) a joint technical note on the mechanics of the 80% cap and standardized withholding certificates (to simplify Italian credits); (2) harmonized telework counting rules that integrate the 25% quota with the 45 day tolerance, supported by the monitoring of time in the 2023 pay slip n. 83, (Revenue Agency - Circular 18/08/2023, n. 25/E. Fiscal profiles of remote working (so-called smart working) and tax regulations for cross-border workers. New features introduced by law no. 83 of 13 June 2023. Issued by the Revenue Agency. Part two. Tax rules for cross-border workers. New features introduced by law 13 June 2023 n. 83 n. 83. Issued by the Revenue Agency. Part two. The tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n administrations and will remain resilient in a context of evolving working models. Notes Footnotes Ministry of Economy and Finance - Press release 06/06/2024 Italy and Switzerland sign tax rules for teleworking. The Protocol permanently regulates the imposition of teleworking for cross-border workers. Issued by the Ministry of Economy and Finance. ↩ Chamber of Deputies - Report 30/12/2024, n. 207 Explanatory and technical report to the law of 30 December 2024, n. 207 "State budget forecast for the financial year 2025 and multi-annual budget for the three-year period 2025-2027". Issued by the Chamber of Deputies. ↩ (Revenue Agency - Circular 18/08/2023, n. 25/E. Fiscal profiles of remote working (so-called smart working) and tax regulations for cross-border workers. New features introduced by law no. 83 of 13 June 2023. Issued by the Revenue Agency. Part two. The tax rules for cross-border workers. New features introduced by law 13 June 2023 n. 83 ↩ (Revenue Agency - Circular 18/08/2023, n. 25/E. Fiscal profiles of remote working (so-called smart working) and tax regulations for cross-border workers. New features introduced by law no. 83 of 13 June 2023. Issued by the Revenue Agency. Part two. The tax rules for cross-border workers. The new features introduced by law 13 June 2023 n. 83 ↩ Civil Code, Section V, Ord., (hearing date 02/17/2026), n. 4888 ↩ Part two. The tax regulations introduced by law 13 June 2023 18/08/2023, n. 25/E. Tax profiles of remote working (so-called smart working) Revenue Agency - Circular 18/08/2023, n. 25/E Tax profiles of remote working (so-called smart working) and tax regulations for cross-border workers. News introduced by law 13 June 2023 n. 83. Issued by the Revenue Agency. ↩ Part two. Tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n. 83, (Revenue Agency - Circular 18/08/2023, n. 25/E. Fiscal profiles of remote working (so-called smart working) and tax regulations for cross-border workers. News introduced by the law of 13 June 2023 ↩ Ministry of Economy and Finance - Press release 06/06/2024 Italy and Switzerland sign tax rules for teleworking. The Protocol regulates permanently imposing teleworking for cross-border workers. Issued by the Ministry of Economy and Finance ↩ Chamber of Deputies - Report 30/12/2024, n. 207 Explanatory and technical report on law 30 December 2024, n. 207 "State budget for the financial year 2025 and multi-year budget for the three-year period". 2025-2027". Issued by the Chamber of Deputies. ↩ Fiscal profiles of remote working (smart working) and tax regulations for cross-border workers by Giuseppe Salaniti - Labor consultant in Turin ↩ Budget Law 2025: Italy-Switzerland cross-border workers by Debhorah Di Rosa - Labor consultant in Ragusa: "The 2025 Budget Law (art. 1 c. 97 L. 30 December 2024 n. 207) intervenes on some important aspects in the tax management of cross-border workers between Italy and Switzerland. Pending ratification, the legislator provides that, starting from 1 January 2024 and until the date of entry into force of the amendment protocol, cross-border workers can carry out up to 25% of their activity in teleworking mode at their home in the State of residence without this leading to the loss of the status of cross-border worker. Furthermore, for the purposes of the territorial definition of taxation, it is expected that the wages received by cross-border workers, and paid by an employer as compensation for an employment activity, are taxable in the Contracting State in which the employment activity is carried out. Finally, it is clarified that the income from employment, provided abroad on a continuous basis and as the exclusive object of the relationship by employees who stay in the foreign country for a period exceeding 183 days within a twelve-month period, is determined on the basis of conventional wages even when returning to Italy to one's home once a week. (art. 1 c. 98, L. n. 207/2024).” ↩ Text of the press release: Ministry of Economy and Finance - Press release 06/06/2024 Italy and Switzerland sign tax rules for teleworking. The Protocol permanently regulates the imposition of teleworking for cross-border workers. Issued by the Ministry of Economy and Finance. ↩ Explanatory report to the 2025-2027 budget bill. Chamber of Deputies – Report ↩ Part two. Tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n. 83, (Revenue Agency - Circular 18/08/2023, n. 25/E. Tax profiles of remote working (so-called smart working) and tax regulations for cross-border workers. News introduced by the law of 13 June 2023 ↩ Part two. Tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n. 83, (Revenue Agency - Circular 18/08/2023, n. 25/E. Fiscal profiles of remote working (so-called smart working) and tax regulations for cross-border workers. New features introduced by the law of 13 June 2023 ↩ Part One. Fiscal profiles of remote working (so-called smart working) Revenue Agency - Circular 18/08/2023, no. 25/E Tax profiles of remote working (so-called smart working) and tax regulations for cross-border workers. News introduced by law no. 83 of 13 June 2023. Issued by the Revenue Agency. ↩ Text of the press release: Ministry of Economy and Finance - Press release 06/06/2024 Italy and Switzerland sign tax rules for teleworking teleworking for cross-border commuters. Explanatory report to the 2025-2027 budget law. Chamber of Deputies - Report 30/12/2024, n. three-year period 2025-2027". Issued by the Chamber of Deputies. ↩ Text of the press release: Ministry of Economy and Finance - Press Release 06/06/2024 Italy and Switzerland sign tax rules for teleworking. The Protocol permanently regulates the imposition of teleworking for cross-border workers. Issued by the Ministry of Economy and Finance. ↩ Part two. The tax regulations for cross-border workers. What's new introduced by law 13 June 2023 n. 83, (Revenue Agency - Circular 18/08/2023, n. 25/E. Tax profiles of remote working (so-called smart working) and tax regulations for cross-border workers. News introduced by the law of 13 June 2023 ↩ Part two. Tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n. 83, (Revenue Agency - Circular 18/08/2023, n. 25/E. Fiscal profiles of remote working (so-called smart working) and tax regulations for cross-border workers. News introduced by the law of 13 June 2023 ↩ Explanatory report to the 2025-2027 budget bill. Chamber of Deputies - Report ↩ Cass. civ., Sec. V, Ord., (hearing date 02/17/2026) 03/04/2026, n. 4888 ↩ Text of the press release: Ministry of Economy and finances - Press release 06/06/2024 Italy and Switzerland sign tax regulations for cross-border workers. The innovations introduced by law 13 June 2023, (Revenue Agency - Circular 18/08/2023). 25/E. Profili fiscali del lavoro da remoto (c.d. smart working) e disciplina tributaria dei lavoratori frontalieri. Novità introdotte dalla legge 13 giugno 2023 n. 83. Emanata dall'Agenzia delle entrate. Parte seconda. La disciplina tributaria dei lavoratori frontalieri. Le novità introdotte dalla legge 13 giugno 2023 n. 83 ↩ Parte seconda. La disciplina tributaria dei lavoratori frontalieri. Le novità introdotte dalla legge del 13 June ↩ Text of the press release: Ministry of Economy and Finance - Press release 06/06/2024 Italy and Switzerland sign tax rules for teleworking. The Protocol permanently regulates the imposition of teleworking for cross-border workers. Issued by the Ministry of Economy and Finance. ↩ Part two. Tax regulations for cross-border workers. The innovations introduced by law 13 June 2023 n. 83, (Revenue Agency - Circular 18/08/2023, n. 25/E. Fiscal profiles of remote working (so-called smart working) and tax regulations for cross-border workers. News introduced by the law of 13 June 2023 ↩ Text of the press release: Ministry of Economy and Finance - Press release 06/06/2024 Italy and Switzerland sign tax rules for teleworking. The Protocol permanently regulates the imposition of teleworking for cross-border workers. Issued by the Ministry of Economy and Finance ↩
Frequently Asked Questions
- What are the main fiscal innovations for frontier workers Switzerland-Italy with the new agreement?
- The new 2020 agreement introduces a model of taxation at source with a ceiling for 'new' cross-border commuters. 'Transitional' cross-border workers (those already active before the agreement) continue to be taxed exclusively in Switzerland. In addition, Italian border municipalities will receive a 40% compensation until fiscal year 2033, helping to balance the effects of the new legislation.
- How do you define a frontier worker according to the new Italy-Switzerland agreement?
- A frontier worker must reside in a municipality whose territory is located, in whole or in part, within 20 km of the border. He must work as an employee in the border area of the other state and in principle return to his or her main residence on a daily basis. There is a tolerance of up to 45 days per year for non-return for professional reasons, excluding holidays and illness.
- What are the frontier areas recognized by the Italy-Switzerland agreement for frontier workers?
- Italian border areas include Lombardy, Piedmont, Valle d'Aosta and the Autonomous Province of Bolzano. On the Swiss side, the areas include the cantons of Graubünden, Ticino and Valais. This bilateral mapping ensures that the scheme applies specifically to high-density cross-border labour markets, avoiding overly broad classifications.
- How is teleworking managed for Switzerland-Italy cross-border commuters according to the new provisions?
- For 2023, bridging rules for teleworking have been envisaged. From 1 January 2024, a 25% adjustment has been introduced for teleworking on a permanent basis, pending ratification of the specific protocol. This means that part of the working time can be carried out from home while maintaining the status of cross-border commuter, with precise rules for the counting of days.
- What is the maximum tax limit applicable to 'new' cross-border workers in the State of employment?
- For 'new' frontier workers, the state in which the work is carried out (state of work) has the right to levy taxes. However, the tax applied cannot exceed 80% of the personal income tax that would apply in that place of work, including local taxes. This sets a ceiling for withholding taxation.