Rules for cross-border commuters in bordering countries

Latest update: 12/12/2020

Italy has entered into a number of agreements against double taxation with neighbouring EU and non-EU countries, containing specific provisions applying to cross-border commuters who carry out employed work. These provisions govern the taxation of income earned by individuals residing in a border area of a contracting State who regularly cross the border to travel to work in another contracting State.

As regards Member States of the EU, the agreements entered into by Italy with the following countries lay down provisions on cross-border commuters:

• Austria: Agreement ratified by Law No 762 of 18 October 1984 (Article 15, paragraph 4);
• France: Agreement ratified by Law No 20 of 7 January 1992 (Article 15, paragraph 4);

Both provisions establish that it is only income earned from employed work in the country of residence of the commuter that is subject to taxation.

As regards non-EU countries, the agreements entered into by Italy with the following countries lay down provisions on cross-border commuters:

• Switzerland: Agreement ratified by Law No 943 of 23 December 1978 (Article 15, paragraph 4), which refers to the Agreement entered into by the two countries on 3 October 1974. The Agreement establishes that it is only income earned from employed work in bordering cantons of Switzerland by residents of bordering Italian municipalities that is subject to taxation in Switzerland, in return for financial compensation to those Italian municipalities.
• San Marino: Agreement between Italy and San Marino, ratified by Law No 88 of 19 July 2013 (paragraph 4 of the Additional Protocol to the Agreement). The Additional Protocol establishes that income earned from employed work by cross-border workers residing in Italy is subject to shared taxation in both Italy and San Marino.