ITALY Law and Practice Contributed by: Emidio Cacciapuoti, Giorgio Bobba and Davide Massiglia, ADVANT Nctm
cash equivalents (ie, time deposits, bank accounts), if compliant with the other require - ments (eg, concentration). • A concentration limit of 10% applies. Mandatory Italian pension funds and other non- mandatory Italian pension funds may also set up more than one PIR benefitting from the exemp - tion from taxation on proceeds. Italian/EU investment funds may serve as quali - fied underlying investments of a PIR, if their investment policy is compliant with the require - ments above (so-called PIR-compliant funds). A PIR may also be set up by subscribing for units of an Italian investment fund. As the target of the PIR incentive is mostly non- professional investors, retail funds units are usually preferred to alternative investment ones (which are more often used as indirect invest - ments of a PIR scheme). “Alternative” long-term individual investment plan (PIR alternativi) The “alternative” PIR was introduced in 2020 as a new type of PIR. The tax benefits are the same as apply to the “ordinary” PIR: exemption from taxation on proceeds and from inheritance tax. The main differences are as follows: • the annual incentivised investment is increased to EUR300,000, and the overall investment into the “alternative” PIR may not exceed EUR1.5 million; • at least 70% is invested into financial instru - ments issued by Italian tax-resident com - panies that are not listed on the FTSE MIB and FTSE Mid Cap index of the Italian Stock Exchange or equivalent, or into financings or credits towards the same companies; and • concentration limits are increased to 20%.
As of 2022, a taxpayer can benefit from the incentives of more than one “alternative” PIR in addition to only one “ordinary” PIR but subject to an overall maximum invested cap of EUR300,000 per year and EUR1.5 million in total. Mandatory Italian pension funds and other non- mandatory Italian pension funds may also set up more than one “alternative” PIR and they are not subject to the above-mentioned maximum investment thresholds. The law introducing the “alternative” PIR repealed the tax incentive applicable to ELTIFs that was introduced in 2020 but that never came into effect, pending the authorisation of the EU Commission. Please see 2.1.1 Fund Structures (reference to SICAFs will be interpreted, mutatis mutandis, as reference to société d’investissement à capital variable – SICAVs). Instead of the SICAF, legislation provides for the possibility to use the SICAV structure (ie, a joint stock company with variable capital). The pecu - liarity of SICAVs, as compared to mutual funds, is that the investor becomes a shareholder of the company and therefore acquires a series of patrimonial rights (right to profits and capital redemption following the redemption request) and administrative rights. Like mutual funds, the capital of a SICAV is not fixed, but varies according to new subscriptions and redemption requests. 3. Retail Funds 3.1 Fund Formation 3.1.1 Fund Structures
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