Italy is a parliamentary republic in Southern Europe and a founding member of the European Union.
After World War II, Italy rapidly transformed from an agriculture based economy into one of the world's most industrialised nations. Machinery, textiles (including closing), industrial design, furniture production, agri-alimentary are important sectors of Italian economy that contribute significantly to the country’s export. Tourism is also one of Italy's most significant economic sectors accounting for about 4% of Italy’s GDP. However, Italy has several problems which slow down the economic growth, including organized crime, corruption, and economic disbalance between southern and northern Italy.
A business model of Italian banking is focused on loans intermediation and other retail services and very limited exposure to market risk. This traditional banking approach has helped the Italian banks in supporting domestic activities.
|Population (2016)||60 665 551 (0.00%)|
|EU Status||member since 1952|
|National Currency||EUR (Euro) since 1 January 1999|
|Nominal GDP (2015)||1 636.4 bln EUR (+0.01%)|
|Nominal GDP per Capita (2015)||26 900 EUR (+0.01%)|
|Real GDP Growth (2015)||0.8 % (2014: -0.4 %)|
|CPI, MoM (Sep 2016)||1.9 % (Aug 2016: -0.1 %)|
|CPI, YoY (Sep 2016)||0.1 % (Aug 2016: -0.1 %)|
|CPI, Year Average (2015)||0.1 % (2014: 0.2 %)|
|Unemployment Rate (2015)||11.9 % (2014: 12.7 %)|
|Government Bond Yield (Sep 2016)||1.27 % (Aug 2016: 1.18 %)|
|Credit Ratings (as of Sep 2016)|
|Fitch||BBB+||good credit quality, outlook stable|
|Moody's||Baa2||lower medium grade, outlook stable|
|S&P||BBB-||lower medium grade|
|Withholding Tax||0.0 - 20.0%|
|Double Taxation Agreements||103 signed agreements|
|Exchange on Request||7 signed agreements|
|Automatic Exchange||starts in September 2017|
|FATCA||IGA in effect since 10 January 2014, Model 1|
|Financial Market Development||3.1 (max 7.0)||rank: 122nd out of 138 countries|
|Banks' Soundness||4.2 (max 7.0)||rank: 106th out of 138 countries|
|Banking Industry Country Risk||4||(1 - lowest risk, 10 - highest risk)|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||100 000 EUR|
|Country Ceiling for Deposits|
|Local Currency (Euro)||Aa2||high grade|
|Foreign Currency||Aa2||high grade|
|Deposit Rates (Aug 2016, EUR)||1.08 % (Jul 2016: 0.86 %)|
|Banking Sector Structure|
|Number of Banks||629|
|Recent Changes (2015)||new banks: 18, closed banks: 32|
|Consolidated Assets (2015)||2 723.19 bln EUR (+0.82%)|
|Intesa Sanpaolo SpA||Unione di Banche Italiane SCpA (UBI Banca)|
|UniCredit SpA||Mediobanca SpA|
|Banca Monte dei Paschi di Siena SpA||Banca Nazionale del Lavoro SpA|
|Banco Popolare SC|
|List of Banks in Italy|
Italy joined the Euro Area on 1 January 1999.
According to Eurostat, nominal GDP of Italy in 2015 was 1 636.4 bln EUR.
Italy underperforms the European Union in terms of real GDP growth with the average annual differential coming to -1.1% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 0.8% which was below the Euro Area average (1.6%) and below the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.
In 2015, nominal GDP per capita in Italy was 26 900 EUR.
Italy has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -5.6% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.
According to Eurostat, inflation rate in Italy in 2015 expressed as annual percentages of average consumer prices was 0.1% which was above the Euro Area average (0.0%) and above the European Union average (0.0%). Inflation rates in 2016 - 2021 are IMF's estimates.
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Italy are shown in Table 1.
|Natural person, resident||20.0||20.0|
|Natural person, non-resident||20.0||0.0|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Italy signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Italy and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
There are also several agreements between Italy and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Italy signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
Italy has FATCA agreement with the U.S. in effect since 10 January 2014 (Intergovernmental Agreement Model 1). Financial institutions operating in Italy are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Italian financial accounts hold in U.S. financial institutions will be reported to Italian authorities.
FATCA and European countries
According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Italy is scored 3.1 out of maximum 7.0 and ranked 122nd out of 138 analysed economies. Soundness of banks is scored 4.2 bringing Italy into the 106th place, trustworthiness and confidence of financial market is scored 3.2 (125th place).
Banking Industry Country Risk Assessment (BICRA) is a methodology designed by Standard&Poor's "to evaluate and compare global banking systems". A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). The BICRA methodology has two main analytical components: "economic risk" and "industry risk". Each of the components is then further divided into 3 "factors" that result in an economic and industry risk score for each country.
Italy is included into group '4' with economic risk scored '5' and industry risk scored '4'.
|Credit risk in economy||high|
|Government support assessment||supportive|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Italy are summarised in Table 3.
|Scheme Participants||all credit institutions operating in Italy, branches of non-EU banks, branches of Italian banks abroad|
|Scheme Exemptions||branches of EU-banks (covered by their home countries)|
|Covered Accounts||repayable funds acquired by banks in the form of deposits or other forms and to bankers' drafts or other similar credit instruments shall be eligible for payment|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||EUR|
Table 3. Deposit guarantee scheme in Italy.
Deposit Guarantee Schemes in Europe
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
Local currency (Euro) deposit ceiling for Italy is set to Aa2 (high grade), foreign currency deposit ceiling is Aa2 (high grade).
Compare Bank Deposits in Italy
Currently there are 629 credit institutions operating in Italy.
Recent structural changes (2013 - 2015) of the banking sector of Italy are summarised in Table 4.
|Number of Opened Banks||5||8||18|
|Number of Closed Banks||19||29||32|
Table 4. Recent structural changes in the banking sector of Italy.
All the credit institutions operating in Italy can be classified into several categories. Table 5 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||88|
The list of the most recently opened banks in Italy is provided in Table 6.
|COMPASS BANCA SPA (new)||November 2015|
|NUOVA BANCA DELLE MARCHE SPA (new)||November 2015|
|UBS LIMITED (new)||November 2015|
|NUOVA BANCA DELL'ETRURIA E DEL LAZIO SPA (new)||November 2015|
|NUOVA CASSA DI RISPARMIO DI CHIETI SPA (new)||November 2015|
|NUOVA CASSA DI RISPARMIO DI FERRARA SPA (new)||November 2015|
|BANCA PSA ITALIA S.P.A. (new)||October 2015|
|CREDIT SUISSE INTERNATIONAL (new)||October 2015|
|EXANE DERIVATIVES (new)||September 2015|
|BANCA DI CREDITO COOPERATIVO BERGAMASCA E OROBICA SOCIETA' COOPERATIVA (new)||June 2015|
Table 6. The most recently opened banks in Italy.
There are 88 branches of foreign banks from 17 different countries in Italy. Table 7 shows 10 countries having the biggest number of branches in Italy.
|Country of Origin||Number of Branches|