Author: Lawyer Enrico Germano

According to data released by the Federal Statistical Office in Switzerland the number of cross-border commuters, working mainly in border cantons such as Geneva, Vaud, Neuchâtel, Jura, Basel-City, Basel-Country and Ticino, has grown by 17.3 per cent over the past five years, going from 311,000 in the first quarter of 2017 to 365,000 in the first quarter of 2022. In the second half of 2022, a record figure of 75,795 beneficiaries of a G permit was reached in Ticino (which has a population of around 353,000), an increase of 3.4 per cent compared to 20211.

Cross-border commuters are considered “those who are employed or self-employed in a member country of the European Union (EU) or the European Free Trade Association (EFTA) and who reside in another member country to which they normally return daily or at least once a week2. In order to be able to work in Switzerland as a cross-border commuter, a special EU/EFTA permit is required; the cross-border commuter must have a permanent residence permit in one of Switzerland’s neighbouring countries and have lived in the respective border area for at least six months3.

According to an article published in the Italian financial newspaper il Sole24ore of last Monday, 22 August 2022 4, it emerges that the Guardia di Finanza (the Italian Financial Police) in Como has begun investigations into cross-border commuters who appear to be simple Italian employees of Swiss companies, but in fact turn out to be their owners. The hypothesis of the Italian Financial Police is that in certain cases taxation has been circumvented “through corporate structures that would make the Italian cross-border commuter appear as a subordinate – and therefore subject to the more convenient tax regime of employees in Switzerland – when in reality he is a director with income to be taxed in Italy”.

It appears that the ongoing investigations only concern cross-border commuters with tax domicile in municipalities bordering the Swiss border, who are at the same time quota holders and employees of Swiss companies. This list of Italian frontier municipalities (in the Lombardy provinces of Como, Varese, Lecco and the Piedmont province of Verbano Cusio Ossola) was drawn up pursuant to the Agreement between Switzerland and Italy on the taxation of frontier workers concluded on 3 October 19745. These are cross-border commuters who, while maintaining their residence in Italy in one of the municipalities on the list, work as employees/subordinate workers on an exclusive and continuous basis for a foreign employer, in this specific case Swiss6.

The fiscal and economic advantage with this system would not be indifferent, as the cross-border commuters would not be taxed at all in Italy, while in Switzerland he would be taxed as an employee, undoubtedly much lower and more favourable than in Italy, avoiding declaring in Italy remuneration as a company director equal to a withholding tax of around 30% and in fact exploiting to his own advantage the Convention between Italy and Switzerland on the prohibition of double taxation7.




4 IlSole24ore of 22 August 2022, p. 4

5 List of Italian frontier municipalities – Lista dei Comuni italiani di frontiera, Ufficio delle imposte alla fonte e del bollo, Bellinzona, Switzerland

6 IlSole24ore of 22 August 2022, p. 4

7 IlSole24ore of 22 August 2022, p. 4