Living the GOOD LIFE for the REST OF YOUR LIFE!
MONEY MATTERS FOR
LIFE IN ITALY!
Italian currency is now the Euro, as is the currency for most of Europe.
Before you become an official expat in Italy you may wish to open a bank account. If you are not ‘officially’ a resident of Italy, the only type of bank account you can open is called the “conto estero”, a non-resident account. This limits you to foreign currency being deposited, including Euros that are imported, Pound Sterling and the U.S. dollar.
The conto estero account pays a higher interest rate than a resident account. You will be able to access and deposit cash into this account wherever in the world you are. This is a good start to establishing a banking presence in Italy prior to deciding on where you are going to live.
Once you have obtained a Residency Visa, and have either rented or purchased a property, you can open a standard bank account. You must be at least 18 years old. The “Permit to Stay” is not sufficient. You will need the Residency Visa. For convenience, select a bank that is international.
You will need the following paperwork when you open your bank account:
Valid passport
Valid “certificato di residenza”
Proof of address in Italy – a utility or telephone bill, or a rental contract
Birth certificate
Proof of your income - like a tax return or
employment contract
Reference from your home bank
Some banks offer special accounts and programs for women, retirees and students, so be sure to ask, because banking is competitive in Italy. Since banks are required to publish the highest interest rates they offer, along with the average market rate, it is wise to shop for a bank that suits you.
Banks do charge for the number of checks written, or the charge is based on your average bank balance. These costs are usually higher in the non-resident accounts.
Appointments are not necessary when opening a bank account. It doesn’t take long. Plan on either depositing cash into the account, or having a wire transfer done. Any transfer of cash or securities to and from another country exceeding €12,500, whether by a resident or non-resident, has to be declared to the Italian Exchange Controls Office, the UIC (Ufficio Italiano dei Cambi)
Your banking tools (debit card and checks) will be sent to you within a few weeks of the account being opened.
When you open your bank account, be sure to ask for a Bancomat card, a debit card generally accepted throughout Italy and used for paying for goods and services, including paying utility bills. It also gives you access to cash machines throughout Italy, even in the smallest towns. All major credit cards are also accepted in the machines.
A Bank Deposit Insurance Fund (Fondo Interbancario di Tutela dei Depositi) covers most deposits in Italian banks guaranteeing the safety of your money.
Many of the smaller banks have Internet banking facilities and the larger banks are very aware of the benefits of e-commerce.
Checking accounts in Italy are interest bearing and that interest is credited to your account quarterly. Don’t get excited -- the rate is low!
It is interesting to note that the Banca Monte dei Paschi di Siena is the oldest surviving bank in the world, having opened its doors in 1472! Today, it consists of over 3,000 branches and does business around the world!
POST OFFICE ACCOUNTS
Post offices also offer banking services. However, non-residents are not allowed to open a Post Office account.
You can also use the Post Office to exchange currencies, and their rates are reasonable, and can sometimes be lower than the fees a bank charges.
Be sure to carry low denomination Euros when in Italy. Many stores and markets won’t change the larger bills and you’ll either have to wait until someone comes in and makes a purchase with smaller notes, or go without making your purchase.
CREDIT CARDS
The use of credit cards in Italy is universal. Just be sure your card logo is posted on the establishment’s front door before assuming they will accept your card. All Visa and MasterCard charges will carry a processing fee and that will be reflected on your monthly statement after the charges have been made. Think 3%.
Your Bancomat ATM card is the most versatile and cost effective card in your wallet. However, if you haven’t opened an Italian bank account, you will not have the card and will have to rely on an ATM.
Be sure your PIN number on your card is no longer than four numerals, as that is the format in Italy.
Carry some Euros with you so you will have them when you arrive in Italy. Using the airport ATM is not recommended.
TAXES If Italy is your permanent residence and you live there more than 183 days each year, then you will pay the Italian government taxes on your world-wide income.
If you are an American citizen you are also required to file taxes in the United States, especially if you are receiving Social Security. To avoid double taxation, the American Citizens Services department of the U.S. State department has an agreement with Italy saying that you are not to be taxed twice on your income.
Living or earning income outside the U.S. does not relieve a U.S. citizen of the responsibility of filing tax returns in the U.S. However, Italy’s double taxation agreement with the U.S. ensures that you will not be taxed twice on your income. This would include Social Security pensions, which are subject to U.S. withholding tax.
SOCIAL SECURITY When you move to Italy, contact the Social Security office and be sure they have your address.
Social Security checks can be deposited directly into your Italian bank account.
There is a Federal Benefits Unit in Rome as well as in Naples. For further information, check out:
http://www.socialsecurity.gov
You must file a U.S. tax return in order to continue receiving your Social Security check. Contact a accountant in Italy who is familiar with the U.S. income tax forms to best achieve this.