June 24 2020

COVID-19 Pandemic: Italy and Switzerland Sign Agreement on Taxation of Frontier Workers

Source: IBFD Tax Research Platform News

Italy and Switzerland have signed an agreement on the taxation of frontier workers who are currently e-working at home due to the COVID-19 pandemic.

The mutual agreement stipulates that, for purposes of the application of article 15(1) and (4) of the Italy - Switzerland Income and Capital Tax Treaty (1976) (as amended through 2015), and article 1 of the Italy - Switzerland Agreement on the Taxation of Frontier Workers and the Financial Compensation for Italian Frontier Municipalities of 3 October 1974, days spent working from home due to the COVID-19 pandemic measures will be deemed to be spent in the state where the frontier workers would have carried out the work without such measures.

The mutual agreement is applicable during the period between 24 February 2020 and 30 June 2020 and is automatically extended until the end of the following calendar month, until the rules limiting or discouraging the regular free movement of workers in both states introduced due to the COVID-19 pandemic cease to exist or the agreement is jointly terminated by the competent authorities of both states.

The agreement was signed in Bern on 18 June 2020 and in Rome on 19 June 2020, and entered into force on 20 June 2020.