How to Calculate Average Yearly Balance in Bank Account
Knowing your average annual balance is an important tool for monitoring your finances. But what is it, how is it calculated, and how does it affect the cost of your stamp duty each year?
To help you navigate these questions, we've created this guide to make these complicated terms and processes simpler to understand. Plus, there's even a great promotional offer if you open your N26 account by June 30, 2021. Read on to find out.
What is an average annual balance?
An average annual balance refers to the average amount of funds in your bank account over a 365-day period, after withdrawals and payments. Using an average annual amount, rather than the initial and final balance for an account, is generally considered a more reliable benchmark for tax-evasion checks carried out by the tax office.
Why do I need to know my average annual balance?
It's important to know your average annual balance in order to fill out your Single Tax Declaration tax form and ISEE form, which is also known as an equivalent economic situation indicator. It represents a key tool when it comes to evaluating your economic situation, and provides you with a clear benchmark. The average annual balance is declared by account holders in the FC.2 section of the ISEE form, under "bank and postal accounts and deposits". The ISEE form is useful for claiming state funds and subsidies based on your income level, like student scholarships or discounts on utilities.
What is stamp duty?
Stamp duty is a tax that's imposed on all current accounts with an average annual balance of €5,000 or above—including postal and savings accounts. This means that you won't have to pay stamp duty tax if your average annual balance is equal to, or below, this threshold. This tax applies both to bank accounts held by individuals, and to accounts held by legal entities—such as companies, organizations, or businesses with a VAT number.
Individuals pay a stamp duty of €34.20 annually, which is divided and paid quarterly. For example, if you're an individual and your average account balance exceeds €5,000 for only one quarter of the year, you'll only owe €8.55 in stamp duty tax as your average account balance wasn't above the threshold for the other three quarters of the year.
How do I request my average annual balance from N26?
If you have an N26 account, you can find your average annual balance for 2019 and 2020 directly in your app. Just open the N26 app, head to 'Support', then tap 'Messages from N26.' The calculation of your average annual balance always begins upon activation of your account. If you need your average annual balance for any year prior to 2019, please contact our N26 Customer Support team via the chat in your N26 app or on our website.
Our stamp duty offer—valid until June 30
Good news—if you open an N26 account today, we'll pay your stamp duty until December 31, 2021. That's a savings of €8.55 every three months. So, what are you waiting for? Open an N26 account now with an Italian IBAN, choose the account type that best suits your needs, and start enjoying the perks of 100% digital banking.
How to Calculate Average Yearly Balance in Bank Account
Source: https://n26.com/en-it/blog/what-is-the-average-balance