ITALY Law and Practice Contributed by: Emidio Cacciapuoti, Giorgio Bobba and Davide Massiglia, ADVANT Nctm
Tax Incentives Under Italian tax law, there are several special tax regimes providing incentives for investing into Italian investment funds. In general, such incentives are granted as exemptions from tax on proceeds arising from the investment and dif - fer according to the nature of the investor and/ Mandatory Italian pension funds (such as enti di previdenza obbligatoria and casse di previdenza ) and other non-mandatory Italian pension funds making long-term investments (with a holding period of at least five years) into, inter alia, Ital - ian/EU alternative funds may benefit from an exemption from tax on the proceeds arising therefrom. or the investment fund. Italian pension funds The investment funds qualifying for the above exemption must invest most (more than 51%) of their capital into shares issued by companies that are tax-resident in Italy, or that are based in EU/EEA countries but have a permanent estab - lishment for tax purposes in Italy. Assets whose proceeds benefit from the exemp - tion are capped at 10% of the total assets of the pension funds. “Ordinary” long-term individual investment plan (PIR ordinari) A PIR is defined as the pool of qualified financial instruments and cash that is entitled to a special tax regime if certain requirements are met. This special tax regime is available to Italian tax-res - ident individuals only, and entails the following: • an exemption from personal income tax (or substitutive taxation) on the proceeds arising from the financial assets underlying the PIR; and
• an exemption from inheritance taxation on the financial instruments included in the PIR, in the case of the death of the holder of the PIR. The financial instruments included in the PIR must be held for at least five years, and the annual incentivised investment is limited to EUR40,000. The overall investment into the PIR may not exceed EUR200,000. The latter thresh - olds were set at EUR30,000 and EUR150,000, respectively, for PIRs established up until the end of 2021. For PIRs set up from 2020 onwards, the amount invested into the PIR will be allocated during each year and for at least two-thirds of the year as follows. • 70% into financial instruments (eg, equity, bonds, non-speculative derivatives), even if not listed on a stock exchange, that are issued by Italian tax-resident enterprises or enterprises that are tax-resident in the EU or EEA and have a permanent establishment for tax purposes in Italy, with the following qualifications: (a) 25% out of the 70% (ie, 17.5% of the overall amount invested into the PIR) into financial instruments issued by Italian tax- resident companies that are not listed on the FTSE MIB index of the Italian Stock Exchange or other major foreign indexes; and (b) 5% out of the 70% (ie, 3.5% of the overall amount invested into the PIR) into financial instruments issued by Italian tax- resident companies that are not listed on the FTSE MIB and FTSE Mid Cap index of the Italian Stock Exchange or equivalent. • The remaining part (the free quota) will not be subject to such limitations and may be invested into other financial instruments or
277 CHAMBERS.COM
Powered by FlippingBook