On 6 January, the Il Globo reported that the move was raising concerns among residents accustomed to the enclave’s special status. It is situated on the banks of Lake Lugano in the Swiss canton of Ticino around 23 km from Italy, has bounced between the countries since at least the 7th Century. Its special status meant that while the 2000 or so residents paid their taxes in Italy, most of the public services provided by Swiss companies. Residents were also exempt from VAT and, because the cost of living is higher in Switzerland, they enjoyed tax breaks. A deal was reached on 20 December. Residents will have to pay VAT, although it is aligned with the Swiss consumption tax of 7.7% – much lower than Italy’s 22% rate.