There are many tax havens in the world. Often these are islands in the Caribbean or the South Seas. In addition, many tax havens are relatively small countries, such as Belize, Malta or San Marino. But there are also tax havens that do not have their own state sovereignty in the classical sense, for example Isle of Man or the Channel Islands. This category also includes the Italian exclave Campione d’Italia in the Alps. It is also considered a tax haven. Rightly so?

1st tax haven Campione d’Italia – Introduction

Campione d’Italia, or Campione for short, is an Italian village. It lies on the east bank of the south-extending arm of Lake Lugano. But if you look at the map or know from your own travel experience that both the west and the east bank of the lake belong to Switzerland at this point, I must agree. But Campione d’Itlalia is an exclave separated by a narrow strip of Ticino from the Italian tribe.

It is precisely these situations in which territories, due to their isolated situation of any kind, often go the way of special tax regulations. Campione d’Italia is a tax haven. But the small town with its almost 2,000 inhabitants is hardly known to anyone in Germany for this special feature. Germany also has a similar exclave in Switzerland with Büsingen on the Upper Rhine. But if you ask about Campione d’Italia in certain circles in Italy, despite the small size of the place and its remote location, you get the surprising answer: “Sure, Campione knows everyone who is interested in gambling in Italy.” Because in Campione is one of only five casinos in Italy, on the other hand it is even the largest. And the latter also has to do with the history of the place.

2nd Campione – a brief look into history

2.1 Campione: from the Romans to the modern period

The Romans already found the place suitable for their purposes. So they founded the garrison town of Campilonum here to defend themselves against the attacks of the Helvets.

After the fall of the Roman Empire, the Lombards took over this region. One of their leaders, Toto von Campione, bequeathed the small town to the Milanese monastery of Sant’Ambrogio in 777. More than 1,000 years later, this meant that the tranquil hamlet became a subject of political debate. Because the belonging of Campione to this Milan monastery remained all the centuries.

2.2. The Turn of Times: Napoleon in Italy

So it remained until Napoleon Bonaparte at the end of the 18th century. The century invaded Italy. As a representative of the French Revolution, he enforced secularization there, too, entirely in their spirit. He thus broke the connection between the monastery of Sant’Ambrogio and the town of Campione. But since he also re-established the canton of Ticino, it was obvious that Campione was finally assigned to it. In recent centuries, Campione had integrated itself into the local federal structure as far as its membership of the monastery of Sant’Ambrogio allowed. For example, they provided the Swiss troops or belonged to their customs territory. But even Napoleon accused Campione of Switzerland. In any case, all efforts of the Ticino to integrate Campion were unsuccessful during Napoleon's rule and also afterwards. Only minor border adjustments were made.

2.3 Campione in the 19th century

This brings us to a new era. It is the time when Italy takes shape as a state entity and thus also receives the tiny appendix Campione. Around the same time, Switzerland lifted domestic tariffs between its cantons. This was also the case with Campione for purely practical reasons: it became an integral part of the Swiss customs territory. And for a long time. Only in 2020, when Italy claimed its own customs authority over the place, this changed; another turning point for the small community. Since then, Campione d’Italia has been part of the EU Customs Union. But more on that in a moment.

2.4. How Campione became Campione d’Italia

Campione has only been called Campione d’Italia since 1933. Because with Benito Mussolini, another leader, who certainly also counted himself among the great, put his stamp on the place. In order to clarify that this exclave is an Italian prayer of sovereignty, he decreed that the addition d’Italia should henceforth supplement the name. So it was a purely nationalist-motivated addition, but it remained, although in everyday life one always speaks only of Campione.

Apparently Campione has attracted more than enough attention from important historical figures. This certainly includes the German Nobel Prize winner Hermann Hesse, who spent his retirement on the opposite side of the lake in Montagnola. At least I am allowed this assessment in view of the long history and the insignificant size of Campione at this point.

3. Casinò di Campione

3.1. The casino as an ideal place for intelligence activities

If you want to develop a better understanding of the peculiarities of Campione, you should also consider the history of his casino. The Italian state founded the Casinó di Campione in 1917 with the intention of attracting foreign diplomats to elicit military and other secrets there. Because of the location of Campione within Switzerland, diplomats from enemy states accredited in Switzerland could come to Italy without crossing the Italian borders.

Small historical insertion: the OSS, the US intelligence service, also used this advantage during the Second World War to gain access to Italy while maintaining Swiss neutrality. As long as they could claim their neutrality, the Swiss allowed the OSS to be granted. The OSS in turn used Campione as a base for the training of Italian partisans and the preparation and implementation of other actions in Italy. This was possible because the inhabitants of Campione arrested the local policemen who were under the Fascist Republic of Salò during the last months of the war. Had the fascists wanted to intervene in Campione, however, this would have succeeded only in violation of Swiss neutrality.

3.2. The Casino of Campione after the First World War

Let’s go back to the early days. When the First World War ended in 1918, the need for intelligence from the exclave was also eliminated. A year later, the doors of the casino closed. In 1933, the casino was reopened. The casino still belonged to the state of Italy, but the administration was under the municipality.

And the community earned a lot of money with the casino over many years, which creates a connection to the question of taxes. We will discuss this in more detail in the next chapter. Before that, we will report on the recent events surrounding the Casino of Campione d’Italia.

In the 1990s, the casino was gradually getting older. Therefore, the plan was made to build a new building. The design was commissioned by the Swiss star architect Mario Botta. In 2007 they moved to the new building built next door, a colossus with nine floors for the game of luck and money. In fact, it was the largest casino in Europe at the time.

3.3. The downturn and the current situation

But the golden times were running out. The economic crisis in the following year alone is likely to have dampened the general interest in gambling. Over the course of a decade, debt accumulated up to EUR 132 million. Of this amount, EUR 42 million was paid to Campione d’Italia, as the municipality had now become the sole shareholder. This development culminated in an insolvency petition in 2018. This was followed by the closure of the casino. This in turn led to a communal crisis, because Campione was now dependent on the tourists who visited the casino. As a result, many inhabitants left Campione d’Italia.

2022 managed to reopen the casino. Although the circumstances are far from optimal, the bill of the new administration seems to work. Because the casino could exceed the expected result for the first year after the reopening by 12%.

4th Campione d’Italia – a tax haven?

Anyone who deals intensively with tax havens and offshore paradises knows Campione d’Italia. The place is certainly not a global player among tax havens, but there were good reasons to award it this attribute. For a long time this was due to the fact that the inhabitants of Campione d’Italia on the one hand used the Swiss franc as their main currency. The reason for this is that many inhabitants of Campiones worked in Switzerland and thus their income, later also their pensions, were paid out in this currency. And the Swiss franc has always been a much cheaper, because more powerful money than the currencies used in Italy. In addition, the Italian financial administration always allowed the inhabitants of Campiones a generous conversion rate when making their income investment. This has saved up to 20% of taxes.

After Italy created special tax incentives in 2017 to attract high-net-worth investors, Campione also benefits from these regulations. In addition to the charming landscape and the mild climate at the foot of the majestic Alps, it is also the tax privileges that led foreigners, especially from Switzerland, to settle in Campione.

But also in the field of value-added taxation, the inhabitants of Campione’s isolated location proved to be a fortunate circumstance. For decades, Campione d’Italia was even completely exempt from VAT.

However, these times have passed since the 2020 reintegration of Campiones into the customs territory of the EU. The government in Rome has refrained from introducing Italy’s high VAT rates in Campione d’Italia. However, it has introduced a local excise duty, which flows to the municipality. This tax, called Imposta locale sul consumo di Campione d’Italia (ICC for short), is based on the VAT rates in Switzerland. After all, these tax rates and derogations are quite moderate.

5th Campione d’Italia as a tax haven – a conclusion

The last chapter was preceded by the question of whether Campione d’Italia was a tax haven. Here we give an assessment and thus a conclusion.

Anyone who has read carefully and also has experience in comparison with other classic tax havens will probably find that Campione is certainly not a classic example of a tax haven. Although there are elements which, at least in some areas, entail lower taxation compared to the mother country, there is no independent tax regime as is the case in other tax havens. Nevertheless, even today, many consultants and intermediaries promote a settlement in Campione d’Italia by referring to its status as a tax haven. In fact, there are a number of good reasons why wealthy people could settle in Campione d’Italia, especially if they come from Switzerland or other countries.

In this way, the movement to Campione d’Italia can be combined with the tax advantages created by Italy – including the acquisition of a Golden Visa. But the local infrastructure also speaks for itself. After all, as a resident of Campione, you enjoy the advantages of Switzerland's exemplary health care system. Special agreements between Italy and the Swiss guarantee this. At the same time, one benefits from the cost exemption, which applies in Italy, for example, in the case of emergency care. In addition, in less than 30 minutes by ferry, Lugano boasts its elite private schools, so that even wealthy families can ensure an upscale education for their children. At the same time, you can also go to your own shops from Lugano. If you do it right, the profits in Switzerland actually enjoy tax exemption. Then only the flat-rate income tax that you have to pay as a tax-privileged person in Italy remains.

In this respect, Campione d’Italia may be seen less as a fully-fledged, independent tax haven, but as a better alternative.