Savings Interest Tax in the EU: What Banks Withhold and What You Owe (2026)

In most of the EU, the bank deducts tax on your savings interest at source and pays you the net amount. In many countries this is a “final” withholding tax: it settles your liability completely and you don't have to declare the interest again. In others the deduction is only a prepayment (an advance) that is credited against the income tax finally assessed on your return. And in a handful of countries the bank withholds nothing — the interest is taxed later through your annual assessment, or under a separate wealth-based regime. The table below summarises the position for a resident individual in each of the 27 member states (rates current as of 2026).

The rules above apply to residents. If you are a non-resident holding a deposit in another EU country, the picture is different. The EU Savings Directive — which once required withholding on cross-border interest — was repealed in 2016 and replaced by automatic exchange of information (the Common Reporting Standard, implemented in the EU as DAC2). In practice this means the bank in the country where you hold the account generally does NOT withhold tax on ordinary deposit interest paid to a non-resident. Instead it reports your balance and interest to the tax authority of your country of residence, and you are taxed at home according to your own country's rules.

Where a country still imposes a source withholding on interest paid abroad (mainly relevant outside the EU, or for residents of non-treaty “blacklist” jurisdictions), a double-tax treaty usually reduces or eliminates it, and you claim credit at home. The upshot: you are not taxed twice, but you are responsible for declaring the interest in your home country — the absence of a deduction at source is not an exemption.

Interest is taxed in one of two broad ways. Under a flat, final (or schedular) regime the interest is taxed at a single rate regardless of your other income — this is the norm across most of the EU (e.g. Germany 26.375%, Italy 26%, Portugal 28%, Belgium 30%, Ireland 33%, Poland 19%, Czechia 15%).

Under a progressive or tiered regime the interest is taxed on a rate scale. The notable scaled regimes are Spain (a separate “savings income” scale: 19% up to €6,000, 21% to €50,000, 23% to €200,000, 27% to €300,000, 30% above), Denmark (interest is capital income taxed progressively, up to roughly 42%), Finland (30% up to €30,000 of capital income, 34% above) and Lithuania (15%, rising to 20% only on very high income).

France sits in between: the default is a 30% flat tax (31.4% from 2026 after a social-charges increase), but you may elect to have investment income taxed on the progressive income scale (0/11/30/41/45%) instead.

Use your allowances (file the exemption order with your bank where one exists, e.g. Germany's Freistellungsauftrag). Regulated accounts can be tax-free (France's Livret A/LDDS/LEP; Bulgarian residents' interest at EU/EEA banks).

Remember that a “final” withholding means you usually don't declare the interest, whereas in Denmark, Sweden, Latvia (for non-withheld interest), Lithuania and Slovenia (for foreign interest) you may need to report it yourself. And if you bank abroad, assume your home tax authority already knows — CRS reporting is automatic.

This guide is general information, not tax advice. Tax rates and rules change frequently; the figures reflect the position as of 2026. Verify the current rules with the relevant national tax authority or a qualified tax adviser before acting.