EU challenges Italy’s tax breaks for domestic-focused savings plans

The European Commission has opened an infringement procedure against Italy over rules governing individual long-term savings plans (Piani Individuali di Risparmio, or PIRs), saying they restrict the free movement of capital within the EU.

The Commission has sent Italy a letter of formal notice over provisions that discourage residents from investing in companies in other member states, limiting opportunities to diversify across the EU single market.

The current design of PIRs also “constitutes an obstacle for non-domestic companies wanting to attract cross-border investments from Italy, thereby contributing to the fragmentation of EU capital markets,” the Commission said.

It urged Italy “to end the discriminatory portfolio-allocation requirement” for tax-advantaged individual savings plans.

Under Italian law, PIR investments are exempt from capital gains tax if they are held for at least five years and 70% of the portfolio is allocated to equities and bonds issued by Italian companies, unlisted companies, or European companies with a permanent establishment in Italy.

The requirement, introduced through the 2017 budget law, was designed to channel capital towards the domestic economy.

The Commission said properly designed Savings and Investment Accounts can support the objectives of the Savings and Investments Union (SIU) by making capital markets more accessible to retail investors, increasing competition among providers and encouraging innovation.

Industry-wide pension funds (known as Fondi Negoziali) and first-pillar pension schemes (Casse di Previdenza) can invest up to 10% of their assets in PIRs and benefit from tax deductions.

The €30bn pension fund for doctors, Enpam, for example, focuses on tax relief for income from foreign investments and domestic investments through so-called qualified investments and PIRs.

Enpam’s tax-advantaged investments totalled €2.71bn in 2025, according to its financial statements.

Last year, industry-wide pension funds Fondo Gomma Plastica, Foncer, Pegaso and Previmoda invested in SMEs listed on Italy’s stock exchange, partly to benefit from tax breaks available to PIR investors.

Since their introduction in 2017, PIRs have attracted 820,000 savers and accumulated €26bn in assets, according to asset management association Assogestioni.