Print this article

Switzerland's Ticino Canton Increases Pressure To Resolve Tax Dispute With Italy

Tom Burroughes

1 July 2011

The Swiss canton of Ticino – an Italian-speaking area - says it will temporarily block some tax at source revenues belonging to Italian cross-border workers, media reports say.

The move is a way of putting pressure on the Swiss government to resolve an ongoing tax dispute with neighbouring Italy as the latter nation tries to stem outflows of potential tax revenue.

More than half of the amount of money which should go to Italy – around SFr30 million ($36 million) – is to be frozen in a Swiss bank account, reports say. It will stay there until the Swiss government starts negotiations with Italy over a new double taxation agreement, agreed by the cantonal government yesterday.

The Swiss finance ministry said that it had taken note of Ticino’s decision and that it was also interested in an end to the tax dispute. Spokesman Mario Tuor told the Swiss news agency that the two sides may restart talks next week.

Italy has retained Switzerland on its own black list of tax havens despite the Organisation for Economic Co-operation and Development having cleared the Swiss 18 months ago.