Worked examples and a practitioner's checklist
Case 1: the Milan investor with Swiss shares
Signora A lives in Milan and holds a portfolio of Swiss blue-chip shares with a Lugano bank in her own name. In 2026 she receives gross dividends of CHF 40,000. The Swiss companies withhold 35 per cent, so that CHF 26,000 is credited to her account. Through her bank she files Form 95 and recovers CHF 8,000, the difference between 35 and 15 per cent. The final Swiss tax is CHF 6,000. In Italy she declares the dividends in section RM. Following the practice of the Agenzia delle Entrate, she pays the 26 per cent substitute tax on the amount net of the Swiss treaty tax, CHF 34,000, which gives CHF 8,840. Her total tax is CHF 14,840, or 37.1 per cent of the gross dividends.
If she wished to rely on the Bergamo judgment of 2025, she would file a refund claim in Italy and argue that the Swiss tax of CHF 6,000 must be credited. If the court computed the Italian tax on the gross amount, the result would be Italian tax of CHF 10,400 less a credit of CHF 6,000, so CHF 4,400 in Italy and CHF 10,400 in total. The difference of CHF 4,440 a year may justify the claim for a large portfolio. It requires litigation against an administration that has not accepted the view. If Signora A neglects the Swiss refund, the Swiss tax stays at CHF 14,000. Her Italian tax falls to 26 per cent of CHF 26,000, or CHF 6,760. The total rises to CHF 20,760, 51.9 per cent of the gross dividends.
Case 2: the Lugano holding company and its Italian subsidiary
Beta SA in Lugano has held 100 per cent of Beta S.r.l. in Brescia for five years. Beta S.r.l. distributes a dividend of EUR 2 million. Under Italian domestic law the withholding tax would be 26 per cent, or EUR 520,000. Under Article 10 of the convention it would be 15 per cent, or EUR 300,000. Under Article 9 of the agreement with the European Union it is zero, provided Beta SA is subject to Swiss profit tax without exemption, is the beneficial owner and is not resident in a third state under another treaty. Beta S.r.l. applies the exemption at source on the basis of the certified form and a certificate of residence. In Switzerland, Beta SA claims the participation deduction under Articles 69 and 70 DBG and the corresponding Ticino rule, which practically eliminates the profit tax on the dividend.1
The structure is sound only if Beta SA has real substance in Lugano. Suppose its two directors live in Brescia and its decisions are taken there. The Agenzia delle Entrate may then argue that Beta SA is resident in Italy under Article 73 TUIR and under Article 4 paragraph 3 of the convention. The dividend would then be a domestic dividend, and the exemption under Article 9 irrelevant. Beta SA's own profits would also become taxable in Italy. If Beta SA is owned by persons resident outside Switzerland, the conditions of Article 23 of the convention apply in addition to any claim under the treaty, though not to a claim under the agreement.
Notes
- DBG, Art. 69 (participation deduction for holdings of at least 10 per cent of the capital or of the profits and reserves, or with a market value of at least CHF 1 million), https://www.droit-bilingue.ch/de-it/6/64/642.11-69-80.html, and Art. 70 (net income from participations); Ticino Tax Law, corresponding provisions. ↩
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.