Reporting Foreign Assets as an Italian Tax Resident: RW Form, IVIE, IVAFE and Common Mistakes

Becoming an Italian tax resident is a milestone that affects not only lifestyle and personal commitments, but also the way you manage and declare your global wealth. Italy applies a worldwide reporting system that requires transparency regarding foreign assets, regardless of where they are held. For internationally mobile individuals, especially high-net-worth families with complex structures, this shift often requires a significant reorganisation of documentation, banking relationships and tax compliance.

Contrary to what many newcomers fear, Italian reporting rules are not designed to be punitive. They are designed to bring clarity. With the right preparation, reporting becomes a predictable annual routine rather than a source of anxiety. But without a proper understanding of the system—and without an early review of your asset structure—mistakes can occur, and these mistakes can become costly.

This guide explains the essence of Italy’s foreign asset reporting obligations and how to navigate them smoothly.

Understanding the RW form: the backbone of Italy’s foreign asset transparency

The RW form is part of the Italian tax return and serves a single purpose: disclosing foreign assets owned or controlled by Italian tax residents. It includes bank accounts, portfolios, shares in foreign companies, real estate, life insurance policies, crypto-assets, trusts, and any other financial investment held outside Italy.

The RW form does not necessarily impose taxes by itself; it imposes transparency. Italy wants to understand where your wealth is located and in which form. For many international residents, this requires reorganising documentation that was previously irrelevant or maintained irregularly across different institutions.

The scope is broad. Even assets held through custodians or entities must be considered. What matters is beneficial ownership and control. If you have signature authority, economic ownership or effective control, the asset must generally be reported.

The sooner newcomers standardise their documents and consolidate historical data, the easier their annual reporting becomes.

IVIE: taxation of foreign real estate

Foreign real estate owned by an Italian resident is subject to a wealth tax called IVIE. The calculation depends on where the property is located. In EU and EEA countries that have adequate exchange-of-information agreements, the tax base is often the local cadastral value. In all other jurisdictions, the tax base is the market value or purchase price.

Italy does not question legitimate foreign ownership. What matters is declaring it properly, identifying the correct valuation reference and ensuring the asset is included in the RW form even if the property does not generate income.

For high-net-worth families with property in Switzerland, the UK, the US or emerging markets, IVIE often becomes a routine part of annual compliance. What changes is not the cost but the transparency.

IVAFE: wealth tax on foreign financial assets

IVAFE applies to foreign financial accounts, portfolios, funds and other investment products. The rate is modest, but the range of assets included is broad. It applies to bank accounts, custodial portfolios, brokerage accounts, and even certain insurance products if they do not qualify as genuine life insurance under Italian standards.

What matters for IVAFE is understanding what counts as a reportable financial asset. New residents often assume that if a foreign institution handles withholding tax or if an investment is already taxed abroad, Italy does not require reporting. This is incorrect. IVAFE is not about income tax; it is a wealth tax that applies independently of performance or cash flow.

Proper classification of foreign financial assets ensures accurate reporting and avoids the need to amend previous years' declarations.

Trusts, foundations and corporate structures: transparency above all

Many global families hold wealth through trusts, foundations or holding companies in multiple jurisdictions. When relocating to Italy, these structures must be analysed under Italian tax rules, which focus on beneficial ownership and control rather than legal form.

Italy will look through certain structures if conditions are met, treating the assets as attributable to the individual. For other structures, the trust or entity itself may have reporting obligations, depending on its nature and connections to Italy.

The main challenge for newcomers is documentation. Trust deeds, company registers, custodian statements and transaction histories must be gathered, reviewed and interpreted before completing the RW form. This often requires coordinated work between tax advisors in multiple countries.

Transparency is the guiding principle. When organised properly, even complex structures fit smoothly within Italy’s reporting regime.

Crypto-assets and digital wealth: clarity with new rules

Crypto-assets fall under the RW form like any other foreign investment. Italy requires residents to declare holdings in exchanges, custodial platforms, cold wallets and DeFi protocols. Whether you use Swiss custodians, US exchanges or multisig offline solutions, the assets must be reported.

Recent Italian rules provide clearer guidance on how to treat disposals, staking, rewards and airdrops. But reporting remains an important compliance requirement, especially for high-net-worth holders with long histories of transfers, early-stage allocations or tokens received through vesting schedules.

Before moving to Italy, crypto investors should consolidate documentation, trace cost bases and ensure that historical records can support their reporting. Once this foundation is in place, ongoing compliance becomes straightforward.

Common mistakes new residents make

The most frequent errors arise not from complex schemes but from simple misunderstandings. Some newcomers assume that if income is taxed abroad, it does not need to be disclosed. Others believe that assets held in “private banking centres” such as Switzerland or Monaco do not fall under Italian reporting. A few imagine that trusts or companies automatically shield assets from the RW form. None of these assumptions are correct.

Other common mistakes include undervaluing foreign real estate, misclassifying life insurance policies, failing to report dormant bank accounts or assuming that small holdings on foreign exchanges are irrelevant.

The truth is that Italy’s reporting rules are clear but require discipline. Once you accept transparency as part of the system, compliance becomes predictable and calm.

Integrating reporting into your long-term wealth plan

Foreign asset reporting is not an isolated exercise. It interacts with your global wealth strategy, your succession planning, your portfolio structure, your real estate holdings and your choice of Italian tax regime.Understanding these interactions early allows you to build a structure that is not only compliant but optimised.

For example, choosing a special Italian tax regime may reduce or even eliminate certain reporting burdens. Reorganising trusts or consolidating investment portfolios before the move can simplify compliance dramatically. Reviewing life insurance or pension structures may reveal better solutions for long-term planning.

Reporting is not an obstacle. It is a tool that encourages coherence in your global wealth structure.

Make Italy work for you, not against you

Italy offers lifestyle, stability and opportunity. But becoming resident means embracing a transparent approach to global wealth. With the right planning, this transparency protects you, reduces risk and strengthens your long-term strategy.

If you are preparing to move to Italy or need help reviewing your foreign asset structure, we are here to assist you.

You can contact us at info@knotted.ch or via WhatsApp at +41 76 771 30 22 for a confidential discussion.