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Switzerland, Italy Agree Tax Deal Covering Campione d'Italia

Tuesday, December 31, 2019

Switzerland and Italy are to amend the customs status of the Italian enclave of Campione d'Italia.

On December 20, 2019, the Swiss Federal Council approved an exchange of notes with Italy regarding Campione d'Italia. The Council said that this exchange of notes is necessary to ensure legal certainty. It also facilitates the transition of Campione d'Italia into the EU's customs territory.

As part of the Swiss-Italian political dialogue on financial and tax issues, in 2016, Italy notified Switzerland of its intention to exercise its customs jurisdiction, including indirect taxation, over Campione d'Italia.

At Italy's request, the EU has agreed that, as of January 1, 2020, Campione d'Italia will be included within the territorial scope of the general arrangements for excise duty. Campione d'Italia will however remain outside the territorial scope of the EU Council's directive on the common system of value added tax.

The exchange of notes confirms the introduction of a local consumption tax in Campione d'Italia. This tax will be in line with the Swiss VAT. The aim is to avoid potential distortions of competition in the surrounding border region.