In general, investments made through Walliance are not deductible, as they relate to fundraising for non-innovative SMEs.
However, there is an exception: such investments, in fact, can come, in some cases, with tax breaks if the investor includes them within a PIR Alternativo “fai da te”, in the obligatory share provided and respecting the constraints of portfolio composition and holding, as per relevant regulations.
Tax breaks thanks to PIR Alternativi “fai da te”
A clarification by the Internal Revenue Service regarding PIRs (Circular No. 19/E of Dec. 29, 2021) included in the category of qualified assets (part of the so-called "mandatory share" of such PIRs) also shares of S.r.l. subscribed through equity crowdfunding platforms. As a result, direct investments made through Walliance can be considered qualified assets and are counted to calculate the mandatory share of PIR Alternativi “fai da te”, with the effect that the relevant tax benefits are achieved under this type of PIR.
What are PIR Alternatives and what benefits do they bring
The PIR Alternativo is a savings plan that, compared to a more traditional PIR, broadens the type of possible investments. Also, to channel more capital into the Italian real economy, it admits financial instruments issued by unlisted Italian SMEs into its portfolio.
Alternative PIRs are also referred to as "fai da te," as they allow for greater customization of investment choices, with the constraint of compliance with the composition of the PIR portfolio (concentration and time holding limits).
If these constraints are met, the investor is entitled to a non-taxable regime for income tax purposes for financial income, as well as a non-taxable regime for inheritance tax purposes. An individual resident in Italy can set up a PIR Alternativo through, for example, a trust company, allocating to them a maximum of € 300,000 per year up to € 1.5 million.
The following constraints must be met to apply the exemption regime of PIR Alternativo.
Concentration limits: for at least 2/3 of the calendar year (i.e., the fraction of the calendar year between the date of the opening of the PIR and the end of the year) the portfolio must be invested no less than 70% in "qualified assets" (so-called "mandatory share"), while the remaining 30% can be invested in "non-qualified assets" (so-called "free share").
Holding period: it is not possible to invest more than 20% of the portfolio in the same instrument, in addition to having to maintain ownership of the instrument for at least 5 years (so-called "holding period"). This affects the overall duration of the PIR and not, therefore, the composition of the portfolio and the individual investments in it. In fact, regulations require that the “mandatory share” remain complied with for at least 5 years, while its internal composition may vary. It is possible to maintain the exemption regime as long as the capital is reinvested within 90 days of share redemption.
The investor can agree with his or her PIR manager that direct investments subscribed through Walliance (even if made in the past) are included in the “mandatory share” of his or her PIR Alternativo “fai da te”.
For further details, we recommend consulting a trusted tax advisor.