On 22.7.2022, the FTA published a joint declaration by Switzerland and Italy regarding the extension of the Covid agreement in the area of taxation


Companies did not have to make any changes to the taxation in payroll accounting for pandemic-related home office work of their cross-border workers from Italy. I refer to various published blogs.

In spring 2022, Switzerland mostly stopped the restrictions due to the pandemic and the companies also largely lifted the restrictions at the normal workplace in Switzerland. The agreement remained in force until now and many companies assumed that they could continue with the fiction of working in Switzerland. Others began to exclude foreign working days, including home office days in Italy, from their withholding tax calculations.

Many cross-border commuters from Italy no longer want to return to work in Switzerland 100% of the time, which is why many additional questions suddenly arise.

Switzerland has a valid DTT with Italy. Art. 15 para. 4 DTA Switzerland – Italy contains the following special provision (free translation):

4. The taxation of income received by frontier workers as remuneration for employment shall be governed by the Agreement between Switzerland and Italy on the Taxation of Frontier Workers and the Financial Compensation in Favour of Italian Frontier Communities of 3 October 1974, Articles 1 to 5 of which are deemed to be an integral part of this Agreement.

Cross-border commuters from Italy (daily return) are subject to Swiss withholding tax on their earned income. The cantons TI, GR and VS transfer approx. 40% of the gross amount of the withholding taxes collected to the Italian border communes as compensation. These cross-border commuters are taxed exclusively in Switzerland.


Joint Declaration between Switzerland and Italy: Validity of the COVID Agreement for the time being until the end of October 2022 also for non-covid-related telework

The declaration is available at the following link (Italian only): https://www.estv.admin.ch/dam/estv/de/dokumente/international/laender/italien/it-dba-aa-20220722.pdf.download.pdf/it-dba-aa-20220722.pdf

According to information from the authorities, negotiations between the two countries had already been taking place for some time. For example, the Italian parliament has still not approved the pending cross-border commuter agreement with new regulations, which is why an entry into force as of 1.1.2023 is probably less and less realistic. Details can be found at the following link (in German, French, Italian): https://www.admin.ch/gov/de/start/dokumentation/medienmitteilungen.msg-id-81813.html

It might have been possible to find an elegant solution for telework with this new agreement because it is less restrictive than the current agreement.
However, due to the current situation in Italy (dissolution of parliament and new elections until the end of September/beginning of October 2022), it must be expected that there will be no new solution after the extension period has expired and that the new cross-border commuter agreement will not come into force on 1.1.2023. If cross-border commuters want to continue to be taxed in Switzerland under the special agreement of 1974, they will probably have to come back to Switzerland to work every day after the Covid agreement expires.

Current need for action for companies with cross-border commuters from Italy:

  • Companies that have already ordered their cross-border commuters back to the office – there are still many other provisions that have to be taken into account with teleworking – can continue to do so.
  • Companies that have been continuing the fiction of Switzerland as the place of work can continue to do so until the envisaged end date according to consultations with the authorities on the basis of this joint declaration of 22.7.2022.
  • Companies that have started to exclude working days after the pandemic measures have been lifted must consider whether they should reverse the exclusion of working days in the payroll and no longer exclude working days for the remaining months.
    This could be done primarily at the request of cross-border commuters under the 1974 special agreement, because otherwise they could lose their cross-border commuter status and be fully taxed in Italy on the income earned in Switzerland (minus the withholding taxes paid in Switzerland).
  • As explained in circular no. 45, a calendar must be kept for days worked abroad, which must be signed by the employee and the employer.
    It can also be assumed that the Swiss authorities will request proof from the taxpayer that the foreign working days are in fact taxed in Italy.


Companies with cross-border workers and international weekly residents are particularly challenged to make decisions regarding mobile working in full awareness of the various legal provisions. Many decision-makers only consider the social security and withholding tax provisions, which can lead to wrong conclusions.

You can contact me for any company-specific questions you might have.

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