Move to Italy, and your home account owes €34.20 a year — your investments, 0.2% of everything

A designer who moves from Berlin to Milan and registers as tax-resident keeps a savings account back home. Italy now taxes it. The charge is €34.20 a year, and it is €34.20 whether the account holds €10,000 or €1,000,000: a fixed line, not a share of the balance. Move the same money into a fund or a portfolio of shares and the charge stops being fixed — it becomes 0.2% of the whole value, every year. On €100,000 that is €200; on the account, still €34.20.1

The tax is IVAFE, the imposta sul valore delle attività finanziarie detenute all’estero — a wealth tax on financial assets held outside Italy by people resident in it. What decides the bill is not how much a resident holds abroad but the wrapper it sits in, and the two wrappers cost the same at exactly one balance.1

Two ways to hold the same money

Article 19 of the 2011 decree that created the tax sets two different charges in one comma. A foreign current account or savings passbook carries a fixed amount, the same one a domestic account pays under the stamp tariff: €34.20 for a person, €100.00 for a company. Foreign financial products — shares, funds, bonds — carry 2 per mille, which is 0.2% of their year-end value, with no minimum and no maximum for an individual.1

A resident chooses neither rate; the wrapper does. A cash balance is charged the flat line, an investment balance is charged the percentage. So the same €100,000 costs €34.20 as deposits and €200 as an ETF — not because one is worth more, but because of the box it is in.

Where the two meet: €17,100

Because one charge is a flat €34.20 and the other is 0.2% of the balance, the two are equal at a single point: the balance where 0.2% comes to €34.20. That is €34.20 divided by 0.002, which is €17,100. Below it the investment is the cheaper wrapper — €10,000 of funds owes €20, against €34.20 for the same cash. Above it the account is cheaper, and it stays cheaper without limit, because its charge never grows.3

The line for the account falls the more it holds: 0.342% of €10,000, 0.0342% of €100,000, and 0.0034% of €1,000,000. The line for investments does not move — it is 0.2% at every size. A wealth tax that shrinks as a share of the wealth is a strange thing, and IVAFE is one for cash and not for investments.3

What it costs, wrapper by wrapper

At €1,000,000 the investment charge is €2,000, which is 58.5 times the €34.20 the same sum owes as deposits. That multiple has no ceiling: the account line is flat, so the gap between the two widens with every euro added.3

Where it doubles, and where it comes back

Two provisions move the investment figure. From 2024 the rate is not 0.2% but 0.4% — 4 per mille — for products held in a state on Italy’s privileged-tax-regime list, the one in the Ministry of Finance decree of 4 May 1999. The same €100,000 portfolio that owes €200 in Germany owes €400 if it sits in one of those places.1

Against that, the decree gives a credit. Where the country the assets sit in has itself levied a wealth tax on them, that foreign tax is deducted from the IVAFE, up to the whole of it. A resident is not meant to pay two wealth taxes on the same holding — though for a foreign account most countries levy none, so the credit is usually nil and the €34.20 stands.1

The line you owe even at zero: the RW

IVAFE is settled inside the annual income-tax return, in the section headed quadro RW. That section exists for a separate obligation, older than the tax: a resident who holds investments or financial assets abroad has to list them in the return whether or not any IVAFE is due on them. The duty is to declare the holding; the tax is a consequence of declaring it.2

That is the part a new arrival is most likely to miss, because it does not feel like income and the money never entered Italy. A home account earning nothing still goes on the RW, and so does a brokerage account, a foreign life policy and, since 2023, crypto held abroad. The return is filed in the autumn following each tax year, and the RW travels with it.2

What this does not price

Three things. It does not price the penalty for leaving a foreign holding off the RW: that sanction was rewritten into the 2024 consolidation of tax penalties and is a fine for not declaring, not a feature of the tax, so it is out of scope here. It prices every account above the €5,000 average balance below which the stamp tariff exempts a domestic one; whether a foreign account under that line is exempt too turns on tax-authority guidance this piece could not fetch, so the table starts at €10,000, where €34.20 is charged either way. And it holds the balance still: IVAFE is charged on the year-end value and is apportioned for the part of the year the asset was held, which a single snapshot does not show.

The figure worth carrying is the shape, not any one row. Italy taxes a resident’s foreign cash by a flat line and their foreign investments by a rate, and the two meet at €17,100. Which side of that a person falls on is decided by how they hold their money, not how much of it they have.