Withholding tax on N26 rewards in Italy
If you are a tax resident in Italy and have an Italian N26 account, certain N26 cash rewards are subject to a 26% withholding tax (WHT). You’ll see the full reward credited to your account, followed by a separate debit for the tax.
How does the tax deduction work?
For every eligible reward paid to customers who are tax residents in Italy and hold an Italian N26 account:
- We credit the full (gross) reward to your N26 account.
- We immediately debit 26% as withholding tax in a separate transaction.
- This aligns with Italian regulatory requirements, and N26 pays this tax to the authorities on your behalf.
Example
- Reward: +10.00 €
- Withholding tax (26%): –2.60 €
- Net benefit you keep: 7.40 €
Which rewards are affected?
The 26% withholding tax applies specifically to:
- Friend Referrals: Payouts made by N26 when you successfully invite friends to join.
What I see in my account
For each affected reward, you’ll see two separate transactions in your N26 app:
- Friend Referral– Credit: Example: +10.00 €
- Withholding Tax 26%– Debit: Example: –2.60 €
In this example, you effectively keep 74% of the reward (7.40 €). You’ll receive the usual notification for the reward credit, and the tax debit happens shortly after.
What does N26 do with the tax amount?
The 26% amount is not a fee from N26.
- It’s a mandatory tax required by Italian law for certain cash rewards.
- N26 doesn’t keep this money.
- We are legally obliged to withhold it and pay it to the Italian Tax Agency (Agenzia delle Entrate) on your behalf.
If you have questions about how this affects your individual tax situation, we recommend speaking to a tax advisor.