Brussels – The European Commission has opened two infringement proceedings against Italy regarding the taxation of investments. The EU executive has set its sights on the tax treatment of interest and other income derived from Italian bonds received by certain non-resident investors, as well as on the rules governing the composition of portfolios under Individual Savings Plans (PIRs), which benefit from tax relief. According to the Commission, both sets of national regulations introduce “obstacles incompatible with the freedoms guaranteed by EU law.”
The first case concerns the tax treatment of interest and other income derived from Italian corporate bonds and government bonds for certain non-resident investors. The Commission has sent a letter of formal notice to Rome, objecting to the failure of Italian legislation to comply with the rules on the freedom to provide services, as set out in Article 56 of the Treaty on the Functioning of the EU and Article 36 of the Agreement on the European Economic Area (EEA).
In Italy, Brussels explains, “this income is generally subject to withholding tax”. However, some non-resident investors may benefit from a tax exemption, provided that the bonds are deposited with an Italian resident financial intermediary, the Italian permanent establishment of a non-resident intermediary or, in some cases, a non-resident intermediary that has appointed an Italian tax representative. In the Commission’s view, these conditions make the custody and administration services offered by financial intermediaries established in other EU or EEA Member States without a permanent establishment in Italy less attractive, thereby discouraging non-resident investors from using these operators.
The second procedure (INFR(2026)2170), opened alongside a similar one concerning Slovenia, relates instead to Individual Long-Term Savings Plans (PIR). According to the Commission, to qualify for preferential tax treatment, Italian legislation requires that a minimum share of the portfolio comprises financial instruments issued by companies that are resident in Italy or the European Economic Area but have a permanent establishment in Italy. A condition which, according to Brussels, “constitutes an unjustified restriction on the free movement of capital as provided for in Article 63 of the TFEU” because it discourages Italian residents from investing in companies from other Member States and limits the scope for portfolio diversification within the single market.
In both procedures, Italy now has two months to respond to the Commission’s objections and address the identified shortcomings. In the absence of a satisfactory response, Brussels may proceed to the next stage of the procedure and issue a reasoned opinion. In addition to the infringement proceedings on taxation, the Berlaymont has decided to press ahead with the infringement proceedings it had initiated regarding EU energy efficiency regulations and to swiftly submit its draft National Building Renovation Plan (NBRP).
English version by the Translation Service of Withub
