What is IVAFE?
IVAFE (Imposta sul Valore delle Attività Finanziarie Estere) is Italy's annual wealth tax on financial assets held outside Italy by Italian tax residents. The rate depends on the type of asset:
- Foreign bank and current accounts: subject to a fixed annual stamp duty of €34.20 per account when the average annual balance exceeds €5,000 (mirroring the domestic Italian bollo)
- Foreign investment accounts, securities, and other financial products: subject to the 0.2% annual rate on market value as of December 31
This is separate from income tax on returns generated by those assets. Even if your foreign investment account earned no income during the year, IVAFE may still be due simply because you hold assets outside Italy. Both categories are reported in Quadro RW.
Who Owes IVAFE
IVAFE applies to Italian tax residents only. If you're a non-resident for Italian tax purposes, you don't owe IVAFE. Residenza fiscale is determined by the usual criteria: more than 183 days in Italy, Italian municipal registration, or center of vital interests in Italy.
If you moved to Italy and became a tax resident, your foreign bank accounts, investment portfolios, pension funds, and securities held abroad are subject to IVAFE.
What Assets Are Covered
IVAFE covers a broad range of financial assets held outside Italy:
- Foreign bank and savings accounts
- Foreign investment accounts (stocks, bonds, ETFs, mutual funds)
- Foreign insurance products with an investment component (polizze vita unit-linked, etc.)
- Precious metals and foreign financial instruments held abroad
- Cryptocurrency (current Italian guidance treats crypto as subject to IVAFE)
It does NOT cover foreign real estate — that's subject to a separate tax, IVIE.
The Bank Account Exemption
Foreign bank accounts with an average annual balance of €5,000 or less are exempt from the €34.20 stamp duty (though they still must be reported in Quadro RW for monitoring purposes). Above that threshold, the fixed €34.20 per account applies.
How IVAFE Is Calculated
For foreign investment accounts, securities, and other financial products, the calculation is straightforward:
IVAFE = Market Value on December 31 × 0.2%
For foreign bank and current accounts with an average annual balance exceeding €5,000, the fixed €34.20 stamp duty applies per account.
If you hold assets in multiple countries, calculate separately for each asset and sum them.
A minimum tax applies: IVAFE is not due if the calculated amount for a specific institution is less than €12. In practice this minimum rarely comes into play for meaningful account balances.
Foreign Tax Credits
If the country where your assets are held levies a similar wealth tax or stamp duty on financial assets, you can claim a credit against your IVAFE liability for what you paid abroad. This prevents double taxation on the same asset. The credit cannot exceed the Italian IVAFE owed on that asset.
Where IVAFE Is Reported
IVAFE is calculated and paid through Quadro RW of the Modello Redditi PF annual tax return. Quadro RW is the foreign asset disclosure section — the same section where you report your assets for monitoring purposes also serves as the basis for calculating the IVAFE liability. Payment is via Modello F24.
Non-disclosure of foreign assets in Quadro RW carries penalties of 3% to 15% of the unreported value — substantially worse than the 0.2% IVAFE itself.