Switzerland, Italy Seek Progress On Cross-Border Taxation
Switzerland has informed Italy of its desire to sign the bilateral agreement on the taxation of cross-border commuters.
The point was made by Didier Burkhalter, the head of Switzerland’s Federal Department of Foreign Affairs, during a meeting with the Italian Foreign Minister, Paolo Gentiloni. They discussed bilateral issues, Switzerland’s policy on Europe, the latest developments in European migration policy, and European security.
The agreement was initialed in December 2015. Under its provisions, the term “frontier worker” will cover those taxpayers that live within 20 kilometers of a border and who, in principle, return on a daily basis to their state of residence. Employees will pay up to 70 percent of the income tax that would ordinarily apply to employment income in the state where they work. The state of residence will continue to levy personal income taxes but will avoid double taxation.
Bilateral trade between Switzerland and Italy was worth CHF34bn (USD35.4bn) in 2015. Italy is Switzerland’s third-largest trading partner. Approximately 70,000 cross-border commuters from Italy work in Switzerland each day, and 50,000 Swiss citizens live in Italy.
