Comparing the burden: Lombardy and Ticino

Company taxes

A comparison of the tax burden must start from the company, because most Italian entrepreneurs who consider a move own an operating company and draw their income from it. In Italy the company pays IRES at 24 per cent and IRAP at a standard rate of 3.9 per cent on a different base, which in Lombardy may vary by sector.¹ In Lugano the combined profit tax amounted to about 16 per cent in 2025 after the cantonal profit tax rate fell to 5.5 per cent.² The cantonal capital tax adds a small burden, partly offset by the credit of profit tax against capital tax that Ticino introduced in its reform of 2018.³ Italy has no tax on the capital of companies. The difference at company level is therefore about eleven to twelve percentage points of profit, a substantial amount for a profitable business but smaller than the difference that Italian entrepreneurs often assume.

For groups within the scope of the OECD minimum tax, which applies to groups with consolidated revenues of at least EUR 750 million, Switzerland levies a qualified domestic top-up tax that ensures an effective rate of 15 per cent. Chapter F.II describes the regime. The owner-managed companies that are the subject of this chapter are almost always below the threshold, so that the ordinary cantonal rates apply to them.

The owner's personal taxes

At the level of the owner, the differences are larger and depend on how he draws his income. Salary is taxed in Italy at progressive rates of up to 43 per cent, plus regional and municipal surcharges that reach 1.73 and 0.8 per cent in Milan.⁴ Social security contributions add a further burden that is heavy for employees and capped for some categories. In Ticino the maximum cantonal rate of income tax was 15.076 per cent in 2024. A reform approved by the voters on 9 June 2024 reduces it by 0.5 percentage points a year from 2025 to reach 12 per cent in 2030.⁵ Cantonal tax is multiplied by the cantonal coefficient, which the same reform returned to 100 per cent, and by the communal multiplier, which in Lugano is about 80 per cent.⁶ Together with direct federal tax at a maximum rate of 11.5 per cent, the top marginal rate for a resident of Lugano is therefore of the order of 38 to 39 per cent in 2024, falling towards 33 per cent by 2030.⁷

Dividends show a different picture. Italy taxes dividends received by individuals from qualifying and non-qualifying participations alike with a final substitute tax of 26 per cent.⁸ Switzerland taxes dividends from participations of at least 10 per cent with partial taxation: 70 per cent of the dividend is subject to federal tax and at least 50 per cent to cantonal tax, with Ticino applying a rate of inclusion that its reform of 2018 set at 70 per cent.⁹ A resident of Lugano who receives a substantial dividend from his Swiss company may therefore pay roughly 25 to 27 per cent at the top marginal rate, close to the Italian substitute tax. The combined burden of company tax and dividend tax amounts to about 38 to 39 per cent in Lugano against about 44 per cent in Milan, if IRAP is disregarded.¹⁰ An entrepreneur who moves to Ticino only to receive the same profits as dividends gains less than the headline rates suggest.

Notes

1. TUIR, Art. 77 (Brocardi.it, above); Legislative Decree No. 446/1997, Art. 16 paras 1 and 3 (regional variation of the IRAP rate by up to 0.92 percentage points). ↩
2. SWI swissinfo.ch, 21 May 2025 (above). Cantonal profit tax rate of 5.5 per cent from 2025. ↩
3. Ticino, Opuscolo for the cantonal vote of 29 April 2018, on the credit of profit tax against capital tax. ↩
4. EC News, 7 January 2026 (above); Tuttocalcolato (above). ↩
5. Repubblica e Cantone Ticino, presentation for the cantonal vote of 9 June 2024, 7 May 2024, https://www3.ti.ch/COMUNICAZIONI/239691/20240507%20-%20Presentazione%20-%20Votazione%20del%209%20giugno%202024%20-%20v4.pdf ("ridurre progressivamente a partire dal 2025 l'aliquota massima dell'imposta sul reddito di 0.5 punti percentuali annui, portandola dall'attuale 15.076% al 12% nel 2030"). ↩
6. Presentation of 7 May 2024 (above) (cantonal coefficient raised from 97 to 100 per cent with a linear reduction of rates); LT, Art. 1b ("Il coefficiente di imposta cantonale è pari al 100%"), https://m3.ti.ch/CAN/RLeggi/public/index.php/raccolta-leggi/legge/num/580. Communal multiplier of Lugano for the relevant year (77 per cent in 2025, about 80 per cent from 2026). ↩
7. Author's approximation: 15.076 per cent × (1 + 0.8) ≈ 27.1 per cent cantonal and communal, plus 11.5 per cent federal (DBG, Art. 36 para. 1, https://www.droit-bilingue.ch/de-fr/6/64/642.11-36-47.html); in 2030, 12 per cent × 1.8 ≈ 21.6 per cent plus 11.5 per cent. Swiss income taxes are not deductible from the tax base, and the federal rate reaches 11.5 per cent only on high incomes. ↩
8. Presidential Decree No. 600 of 29 September 1973, Art. 27, and TUIR, Art. 47, as amended by Art. 1 para. 1003 of Law No. 205 of 27 December 2017, commentary at Brocardi.it, https://www.brocardi.it/testo-unico-imposte-redditi/titolo-i/capo-iii/art47.html ("aliquota del 26% a titolo di imposta ... a prescindere dal tipo di partecipazione posseduta - qualificata o non qualificata"; dividends from 1 January 2018, with a transitional regime for profits accrued up to 2017). ↩
9. TRAF final vote text (above) and DBG, Art. 20 para. 1bis, https://www.droit-bilingue.ch/de-fr/6/64/642.11-20-29.html ("sind im Umfang von 70 Prozent steuerbar, wenn diese Beteiligungsrechte mindestens 10 Prozent des Grund- oder Stammkapitals ..."), and Art. 7 para. 1 StHA (50 per cent); LT, Art. 19 para. 1bis ("imponibili in ragione del 70 per cento"), https://m3.ti.ch/CAN/RLeggi/public/index.php/raccolta-leggi/legge/ num/580. ↩
10. Author's approximation. Lugano: profit tax 16 per cent, then dividend taxed at about 70 per cent × (11.5 + 27.1) per cent ≈ 27 per cent, giving 1 − 0.84 × 0.73 ≈ 38.7 per cent. Milan: 1 − 0.76 × 0.74 ≈ 43.8 per cent before IRAP. Wealth tax and social contributions are not included. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.