Tax on interest in Italian bank accounts

I have migrated here from another Italian forum which shall remain nameless and I apologise for the fact that my first post here is a purely self-interested one but here goes.

My understanding of the double taxation agreement for UK residents is that you don't pay tax twice on the same asset.  My problem is I am not sure what the rate of tax is on interest on accounts earned in Italy.  I read somewhere on the web that it is either 12.5% or 20%.  If it is the latter, then there should be no more UK tax to pay for me as a basic rate taxpayer.  I am assuming that the reference to 'capitalizz. competenze' is interest paid and that it is already net of Italian tax but how much is that tax?

Get off Neil, you can't come on here with such a complex question...   

Only kidding, but you are still not getting an answer as I don't know.... But sure someone on here will know. Welcome to a much better forum....

I know it's not very stimulating and I don't intend to do much posting on this thread if I can help it...

... sorry Neil... now a serious answer, me thinks 20% if our statement is anything to go by (and my calc is correct)

Earning interest on an Italian bank account?  In my dreams!

Exactly.  A current account in Italy will earn you - 0.05% interest, which once you have pid your bollo and bank charges will leave you with a healthy debit - which you can probably offset against your tax due.

Well it would appear these pay 2% BancoPostaClick LINKMind you some may not class it as a bank...  

So 2% lordo, on 10 grand will get you 200 a year before tax and bollo.   Which will mean 120 or 70 in your pocket depending on your tax bracket.  It doesn't make my pulse race as an investment!

I agree Modi, but then again, that's a fair few litres of wine and better in your pocket than not... Also it's a current a/c for which in the UK you will likely get nothing...!

ghiro wrote:Earning interest on an Italian bank account?  In my dreams!

It's not a current account - it's a savings account which pays a princely 0.5%...I would rather it paid no interest at all and then I wouldn't have this hassle but it's cheaper than having a current account with all its attendant charges.

I would say... change the account to one that will pay no interest. It is more of a nuissance and the low interest does not justify all the trouble it causes.