On 28 March 2017, the Italian tax authorities published a decision clarifying the taxation of cross-border commuters within the meaning of the cross-border commuter agreement between Switzerland and Italy.
According to Article 1 of the Agreement between Switzerland and Italy on the taxation of frontier workers of 3 October 1974, salaries, wages and other components of the remuneration received by a frontier worker from paid employment can only be taxed in the State in which the work is carried out.
In a decision of 28 March 2017 (Risoluzione N. 38/E), the Italian fiscal authorities clarified that a cross-border commuter is defined as a person who (i) works in the Canton of Grisons, Ticino or Valais and (ii) is resident in a municipality whose territory is wholly or partly within a 20 km wide zone along the border. If the second condition is not met, Article 15 DBA Switzerland - Italy of 9 March 1976 applies, according to which income in excess of EUR 7,500 is added to taxable income in Italy, with foreign tax credit.
