PIR Long-Term Savings Plans: All the rules in the revenue prospectus

with Circular No. 19 / E of December 29, 2021 Revenue assesses the discipline of PIR’s long-term savings plans.

In particular, in light of the various changes that PIR regulations have undergone in recent years, the publication summarizes the rules and provides clarifications to support those who intend to use these subsidized savings tools.

We recall that the 2017 budget law was presented PIR or a tax system that provides that income of a financial nature is not subject to tax, for income tax purposes (Capital Gains and Miscellaneous Income), Derived from investments made through Individual Long-Term Savings Plans that comply with the characteristics expressly set out in law (investment restrictions and prohibitions), In addition to not being taxed, for inheritance tax purposes, in order to convert the mortgage contract for financial instruments held in the plan.

The purpose of this financial discipline is to benefit Directing family savings towards investing in financial instruments for industrial and commercial companies, Italian and European, rooted in Italian territory, where the need for financial resources is greater and supply through the banking channel is insufficient.

Pir system changed:

• Pursuant to the Tax Decree related to the 2020 Budget Law (Legislative Decree No. 124/2019),
• By Re-launch Decree (Legislative Decree 34/2020)
• Pursuant to the Budget Law 2021 (Law No. 178/2020).

Currently, it is possible to create “Pir 3.0” (plans set from January 1, 2020) and “Alternative Pir” (from May 19, 2020).

In view of these innovations, and after obtaining the contributions of private investors, financial operators and trade associations in public consultation, the Agency, together with the relevant practice document, evaluates the rules to be observed, taking into account also the technical aspects of the complexity of the matter.

As specified in the press release accompanying the release of Publication No. 19/E of December 29, revenue states, for example, that:

• srl shares can be included in subsidized investments in regular plans only if they are offered to the public,
• There are no restrictions on shares owned in alternative plans (i.e. those created as of May 19, 2020)
• The Pir system and the tax system for investments in start-ups and innovative SMEs are not alternatives: So it can be applied together

Procedures for creating a program implementation report

As defined in a specific paragraph of Publication No. 19 / e, the principle of “uniqueness” of PIR89 does not apply to pension and pension funds, Thus they can hold more PIRs.

For these subjects, the tax exemption for income from investments in RIPs is established, provided that investment restrictions are respected for the resources earmarked for qualified investments and the investments are held for at least five years.

Especially, Social Security and Pension Funds may also be holders of PIR 3.0 and alternative PIRs in accordance with the investment restrictions set forth in the relevant regulations, As shown above, As well as the obligation to retain, for at least five years, the investments held in the plans.

The (maximum) amount limits for annual investment and aggregate investment do not apply.

Without prejudice to this exclusion, it is believed that in the absence of express regulatory provisions, The above subjects must comply with all other conditions: Time requirements, composition, concentration and liquidity constraints required by the relevant legislation. As for pension and pension funds, it is envisaged a quantitative limit of 10 per cent of the assets generated by the financial statements of the previous year; This limit represents, in fact, the maximum amount that must be taken into account, in general, also for the qualified investments referred to in paragraph 89 of Article 1 of the 2017 Budget Law.

For the purposes of applying this limit, it is believed that if significant investments are made in a financial year for the purposes of the above exemption regimes up to the 10 percent limit during the year, the subsidized investments can only be made up to a maximum 10 percent limit of the increase in assets.

However, in the event of a decline in assets, no more qualified investments can be made, as those investments made in previous years remain valid as such.

It is understood, however, that the additional investment made in subsequent years can amount to a limit of 10 per cent of the assets arising from the previous year’s statement, if the investments were made in the previous year “below the threshold”.

In this regard, the following example applies:

• If the assets in year X-1 are equal to €100 million, the maximum amount that can be supported in year X for eligible investments and the PIR is €10 million. If investments are made to an extent less than this limit (for example, 7 million) and assets in fiscal year X are equal to 120 million euros, then investments can be made up to 5 million in year X + 1. euros, up to a maximum of 12 million (120.000.000 * 10%) and the net backed investment in year X (7.000.000);
• If investments are made in year X + 1 for only 3 million euros and at the end of that year the assets are reduced to 110 million euros, more investments can be made in year X + 2 for only 1 million euros [(110.000.000*10%) – 7.000.000 – 3.000.000] = 1,000,000