New Cross-Border Double Taxation Agreement between Switzerland and Italy – Updates - Tax and Legal blog


On 1st March 2022 the Swiss Parliament granted final approval for the new double taxation agreement for frontier workers (“the Agreement”) between Switzerland and Italy. With their approval Switzerland has completed the formal process to put the Agreement to a final vote. On the Italian side, similar steps are being taken. Provided both countries conclude the ratification process in 2022, the Agreement will be applicable as of 1st January 2023, leading to important changes for both Italian and Swiss cross-border commuters.

The new Agreement in a nutshell

On 23rd December 2020 Switzerland and Italy signed a new agreement on frontier workers which will replace the old double taxation agreement for frontier workers from 1974.

Here are some highlights to look out for:

  • Cross-border worker status clarified. The new Agreement re-defines the concept of frontier workers. A cross-border worker is defined as an employee residing within 20 kilometres of the border returning to their residence on a daily basis. The cross-border status can be lost if the employee does not return to their ordinary place of residence for more than 45 days per calendar year.
  • Withholding tax rules According to the Agreement, the country of employment levies a withholding tax on their wages and similar remuneration of up to 80% on the ordinary withholding tax. Furthermore, the country of residence is entitled to raise income tax so as to avoid double taxation, i.e. to tax the remaining 20% of the wages.
  • Reciprocity The Agreement is also applicable to frontier workers resident in Switzerland and working in Italy.
  • Regular review The Agreement will be reviewed and adjusted, if needed, every 5 years. Also a future increase in remote working may lead to amendments of the treaty and the respective additional Protocol.

Once in force, the Agreement will replace the former one. However, transitional rules are in place for cross-border commuters who work or have worked in the cantons of Ticino, Grisons and Valais between 31st December 2018 and the date on which the Agreement comes into force. These commuters will continue to be taxed exclusively in Switzerland, although individual cases may be subject to review. Due to the lack of taxability in Italy until 31st December 2033 for these transitional cases, Switzerland will continue to pay a refund of 40% of the withholding tax levied to the Italian border municipalities.

Approval of the agreement: current status and future expectations

Further to the approval by the Swiss Government (please read our earlier blog for more information on this), the final Parliamentary vote is expected during the ongoing Spring session, ending on 18th March 2022. In case of a positive outcome and provided that a referendum will not be held, the Agreement should be ratified by Switzerland in Summer 2022.

For Italy, although a draft of the law was approved by the Italian Council of Ministers on 3rd December 2021, the Parliament has not discussed the Agreement yet. While an official date has not been released, it might be possible that the Italian Senate will vote on the Agreement in March 2022, leading to final ratification by end of Summer 2022.

Deloitte's View

After many years of negotiations and postponements, the revised Double Taxation Agreement between Switzerland and Italy for cross-border workers is a welcome update, providing clarity on which employees are to be classified as cross-border workers and the income tax treatment.

With the new Agreement close to ratification in both countries, we would expect both countries to conclude the legislative process for its approval by Summer 2022.

In the meantime, it remains important for employers to remain up-to-date and identify actions that might be required under these new rules.

If you have any questions about this topic or would like to share your views, please reach out to our key contacts below.

Key contacts


David Wigersma - Partner, Global Employer Services

David has 20 years of experience in the area of international corporate and individual taxation planning. He specialises in addressing the complex compliance needs of a cross-border workforce with varied elements of compensation.


Stephen Turley 110x110

Stephen Turley - Senior Manager, Global Employer Services

Stephen is a Senior Manager with Deloitte’s Global Employer Services Department and leads the international social security practice for Switzerland. In that role, he supports clients with a variety of topics in connection to cross-border employees ensuring compliance of their mobile workforce and providing guidance to international social security obligations, benefits and entitlements. Stephen is a lecturer on social security at the University of Applied Science Winterthur and a frequent speaker at public seminars. He holds a MLaw degree from Zurich University and a BA of Arts from Trinity College Dublin.


Trifici Andrea Martina_

Andrea Martina Trifici - Consultant, Global Employer Services

Andrea is a consultant within Deloitte’s Global Employer Services Department, Switzerland. In that role she supports clients with a variety of topics within international expatriate taxation, social security and global mobility support to ensure compliance among their mobile workforce. Andrea holds a MLaw degree from Perugia University (Italy) and a postgraduate Masters in Tax Law from Scuola di Formazione IPSOA (Milan, Italy). Alongside working in fields of international individual tax and social security in Switzerland, she is admitted to practise the profession of lawyer in Italy. Andrea started her career in Italy and moved to Switzerland in 2021.



Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Comments are moderated, and will not appear until the author has approved them.