February 11 2021

Ministry of Economy and Finance Issues Implementing Rules on Local Consumption Tax for Campione d’Italia

Source: IBFD Tax Research Platform News

The Ministry of Economy and Finance has issued a Ministerial Decree providing implementing rules on the local consumption tax for Campione d'Italia (imposta locale sul consumo di Campione d'Italia, ILCCI), introduced by the Budget Law for 2020.

The ILCCI applies to supplies of goods and services to final consumers taking place in Campione d'Italia and on importations of goods carried on by final consumers. Certain supplies are exempt, including supplies made for medical, social or educational purposes. Taxable persons are individuals and companies that exercise a business activity, art or profession and make qualifying supplies. However, the tax burden is imposed on the final consumer.

The ILCCI rates are identical to those of the Swiss value added tax. In particular, the standard ILCCI rate is 7.7%. The reduced ILCCI rate of 3.7% applies to supplies of hospitality services (provisions of breakfast included) while the reduced ILCCI rate of 2.5% applies to supplies of alimentary products, newspapers and books, medicines and other qualifying products consumed on a daily basis.

The Ministerial Decree of 16 December 2020 was published in Official Gazette No. 33 of 9 February 2021.

Note: The ILCCI was introduced following the implementation of Council Directive 2019/475 of 18 February 2019, under which Campione d'Italia is part of the EU Customs Union and subject to the EU rules on excise duties, but it remains outside the scope of application of the EU value added tax. In particular, the ILCCI aims at ensuring a level playing field between enterprises established in Campione d'Italia and Switzerland.