It is located at 1,816 metres above sea level. Livigno's main river is called Akua Granda, also known as Spöl. Trepalle, which belongs to Livigno, is considered Europe's highest inhabited parish. A part of the old village was completely destroyed in the 1960s by the creation of an artificial lake (see Akua Granda).
Livigno enjoys a particular tax status as duty-free area. Italian VAT is not paid. Although tax advantages for Livigno were recorded as far back as the sixteenth century, the current VAT exemption was introduced by the Austro-Hungarian Empire around 1840. It then was confirmed by the Kingdom of Italy around 1910, then by the Italian Republic and the EEC in 1960. The reason for such a status is justified by the difficulty in reaching Livigno during winter times, for up to six months a year, and the century-long history of poverty in the region. The various states, therefore, wanted to make sure people would have an incentive to continue living in the area (so that they could still claim it territorially); at the same time, the tax income from Livigno was likely negligible for any state involved. Even nowadays, only three roads lead to the town, two from Switzerland, through the Forcola pass (2315 m, open in summer only) and the Munt La Schera tunnel, and one from Italy, through the Foscagno pass (2291 m). However, given the astonishing increase in wealth of the recent decades, the improvement of roads and the widespread availability of cars, many outsiders see this exemption as an unjustified privilege.
Buying cheap drinks and cigarettes don't forget the customs waiting for you when you leave Livigno, don't buy more than it is allowed. When we went the road from Livigno to Bormio, many cars were checked on the road for carriage of illegal amounts. We were asked how many bottles we have bought in Livigno, how many cigarettes, etc.