Tax residence of individuals

Opening a company in Switzerland is only half the job; the other half is understanding where you, as an individual, are tax-resident. This is where the taxation of your personal income is decided, and it is where many “Swiss” projects fall apart: a company in Lugano, but a person still resident in Italy. Here are the criteria that really matter.

When you are resident in Switzerland

Under Swiss law, an individual is subject to unlimited taxation when they have their domicile or tax residence in Switzerland:

• Domicile: you live in Switzerland with the intention of settling there on a lasting basis. It is the centre of your life.
• Tax residence: you stay in Switzerland, even without domicile, for at least 30 days while carrying on a gainful activity, or for at least 90 days without any gainful activity.

Anyone resident in Switzerland is taxed on income and wealth at federal, cantonal and municipal level. Note: Switzerland also levies a cantonal wealth tax (on net assets), which does not generally exist in Italy.

When you remain resident in Italy

Italy treats as resident anyone who, for the greater part of the year (183 days), meets at least one of these criteria:

• registration in the resident population register;
• domicile or residence in Italy under civil law, with particular weight given to where personal and family relationships develop.

The critical point is registration with AIRE (the register of Italians resident abroad). Moving to Switzerland without registering with AIRE, or registering only formally while leaving family, home and interests in Italy, is not enough to shift residence. Cancelling your entry in the population register is necessary, but not sufficient on its own.

The deciding criterion: the centre of interests

When both States could consider you resident, the Italy–Switzerland double taxation convention applies, setting out a hierarchy of criteria (the so-called tie-breaker rules) to assign residence to a single country:

1. permanent home: where you have a home permanently available to you;
2. centre of vital interests: where your personal and economic ties are closest (family, assets, activities);
3. habitual abode: where you actually spend more time;
4. nationality, as the final criterion.

The real centre of gravity is the centre of vital interests. If your family stays in Milan, your children go to school in Italy, your main home is Italian and your prevailing economic ties are there, your residence is unlikely to shift, however many days you spend in Lugano.

Typical mistakes of those who relocate

• Not registering with AIRE, thinking it is enough to open a company across the border.
• Registering with AIRE but leaving the centre of your life in Italy: home, family, car, utilities, doctor.
• Confusing the company’s residence with your own: they are two distinct assessments, which nevertheless must be coordinated.
• Overlooking Swiss wealth tax when weighing up the advantages.
• Underestimating cross-border commuters: those who live in Italy and work in Switzerland follow specific rules (the cross-border commuter agreement), different from a full relocation.

Why it matters when you open a company

Personal residence and company residence go together. An entrepreneur who sets up in Switzerland but remains resident in Italy drags along two problems: their personal income stays taxable in Italy, and their continued presence in Italy fuels the risk that the company too will be regarded as managed from Italy. A relocation done properly closes both fronts; a relocation only on paper leaves them both open.

How to set up a relocation that holds

A credible change of residence is made of verifiable facts: a rental contract or purchase of a home in Switzerland, a residence permit, the shift of your centre of affections and interests, the closing or reduction of your Italian ties, and consistency between where you live, where you work and where you make decisions. It is not a form to fill in: it is a life project that must be documented.

At SIH ONE we analyse your personal position and that of the company together, verify where residence actually falls under the convention, and build a coherent path across permit, home, vital interests and corporate structure — so that the personal and business sides do not contradict each other.

Are you considering a move to Switzerland and want to know where you would really be resident? Let’s analyse your position: the AI assistant answers immediately, and a professional gets back to you within a day.