Switzerland and Italy reach agreement on Campione d'Italia

At Italy's request, the competent EU authorities have amended the relevant legislation so that Campione d'Italia will be incorporated into the EU customs territory from 1 January 2020, but will remain outside the scope of the VAT Directive.

The exchange of notes thus confirms the introduction of a local consumption tax in Campione d'Italia that is in line with the Swiss value added tax (VAT) system, thus avoiding possible distortions of competition in the border area concerned.

The municipality became insolvent in 2018 and by 30 November 2019 had accumulated debts of around five million francs. In the exchange of notes Italy acknowledges the debt situation.

At the same time, the agreement underlines the importance for Campione d'Italia of the continuation of certain basic services by Swiss companies and institutions. These include services such as waste incineration in Switzerland, wastewater treatment and telephony, as well as the temporary validity of Swiss driving licences for residents of Campione d'Italia.

The change in the customs status of Campione d'Italia creates a new border crossing (with simplified customs clearance) between Switzerland and Italy.

The press release is available here.