Italy PIR 2026: Piano Individuale di Risparmio — Allowances, Eligible Assets, and Tax

TL;DR — What is a PIR?

The Piano Individuale di Risparmio (PIR) is the main Italian tax wrapper for retail investing, introduced in 2017 to channel household savings into Italian SMEs and government bonds. A PIR-ordinario lets you contribute up to EUR 40,000 per year (raised from EUR 30,000 in the 2023 Bilancio Law) and EUR 200,000 lifetime cap, hold the assets for at least 5 years, and walk away with zero Italian capital gains tax, zero dividend tax, and zero inheritance tax on the underlying assets. A separate PIR Alternativo (PIR PMI) adds another EUR 300,000 annual and EUR 1.5 million lifetime ceiling dedicated to Italian SME and unlisted instruments — designed for higher-net-worth participation in the Italian SME ecosystem.

Five quick facts (2026):

1. Ordinary PIR annual limit: EUR 40,000.
2. Ordinary PIR lifetime cap: EUR 200,000.
3. PIR Alternativo annual limit: EUR 300,000, lifetime EUR 1,500,000 — for sophisticated investors.
4. Tax inside after 5-year hold: 0 % CGT, 0 % dividend tax, 0 % inheritance tax on PIR assets.
5. Eligibility: Italian tax resident only; one PIR per person.

This is informational content, not tax or legal advice. Consult a tax adviser for your specific situation.

Eligibility Rules

To open and hold a PIR in 2026 you must be:

• An individual tax resident in Italy (persona fisica residente fiscalmente in Italia) — Italian fiscal residence is the binding requirement.
• One PIR per person — you can only have a single PIR-ordinario at any time. You can transfer it between providers but not duplicate.
• The PIR-Alternativo (PIR PMI) is a separate envelope and can be held alongside an ordinary PIR by the same person.
• No age restriction in law, though most providers require 18+. Minor PIRs through guardians exist in some structures.

You qualify as Italian tax resident under article 2 of the Italian Testo Unico delle Imposte sui Redditi (TUIR) if for more than 183 days in the year you:

• Are registered in the Anagrafe della Popolazione Residente (resident population register), OR
• Have your residence (residenza) in Italy under the Civil Code, OR
• Have your domicile (domicilio) in Italy.

Citizenship is not required — Polish, German, French citizens who become Italian tax resident qualify.

Non-residents cannot open a PIR. If you cease to be Italian tax resident, the PIR rules require special handling (see non-resident section).

Annual & Lifetime Allowances

PIR-Ordinario (the main wrapper):

• Annual contribution limit: EUR 40,000 (raised from EUR 30,000 by the 2023 Bilancio Law, in force from 1 January 2023).
• Lifetime contribution limit: EUR 200,000.
• 5-year holding rule for tax exemption.
• One per person.

PIR-Alternativo (PIR PMI):

• Annual contribution limit: EUR 300,000.
• Lifetime contribution limit: EUR 1,500,000.
• 5-year hold for tax exemption.
• Designed for high-net-worth investors backing Italian SMEs and unlisted instruments.
• Can be held alongside a PIR-Ordinario.

Indexation: the EUR 40,000 / EUR 200,000 ceilings are set by Parliament and revised by Bilancio Laws — not automatically indexed.

Carry-forward: unused annual allowance is not carried forward. Use it in the year or lose it.

Combined ceiling for an individual: EUR 40k + EUR 300k = EUR 340k annually; EUR 200k + EUR 1.5m = EUR 1.7m lifetime if you max both envelopes — a very generous cap by EU standards.

What Investments Are Allowed

PIRs are structured around mandatory Italian-asset quotas designed to channel household savings into the Italian economy.

PIR-Ordinario asset composition rules (in force 2026):

The PIR must hold, for at least two-thirds of each calendar year:

• At least 70 % in qualifying instruments — shares or bonds issued by Italian-resident companies (or EU/EEA-resident companies with a permanent establishment in Italy).
• Of that 70 %, at least 25 % (so 17.5 % of total PIR) must be in instruments not issued by FTSE MIB-listed companies (i.e., Italian mid- and small-caps, FTSE Italia Mid Cap and similar).
• Of that 70 %, at least 5 % (so 3.5 % of total PIR) must be in instruments not listed on FTSE MIB or FTSE Italia Mid Cap (i.e., Italian small-cap or unlisted SME-linked).

Concentration limit: no more than 10 % of PIR assets in instruments issued by a single company or group.

Cash: PIR can hold cash (in an Italian-bank deposit account dedicated to the PIR) — counts toward the 30 % non-qualifying bucket.

Investment universe in practice (eligible):

• Italian-listed shares (FTSE MIB, FTSE Italia Mid Cap, FTSE Italia Star, AIM Italia).
• Italian government bonds (BTP, CCT, BOT) — count toward the 30 % free bucket.
• PIR-compliant mutual funds and ETFs — funds explicitly structured to meet the PIR composition rules (the easiest way for retail investors; major Italian asset managers issue these).
• PIR-compliant insurance policies (polizze PIR) — life-insurance contracts structured to meet PIR composition rules.
• EU-resident companies with Italian permanent establishments — counts toward the 70 % quota.

PIR-Alternativo asset composition: at least 70 % in qualifying instruments issued by Italian or EU/EEA resident companies (with Italian permanent establishment) other than those listed on the FTSE MIB Main Market — effectively dedicated to Italian SMEs.

Not allowed:

• US, UK, Asian shares directly.
• Global equity ETFs (most fail the 70 % Italian-issuer test).
• Crypto-assets in any form.
• Real estate held directly.
• Derivatives held outside compliant structures.

Practical approach: most retail PIR investors hold a PIR-compliant fund or insurance policy issued by Italian asset managers (Anima, Eurizon, Mediolanum, BancoPosta Fondi) rather than building the composition themselves — the funds handle the composition rules automatically.

Tax Treatment Inside the Wrapper vs Outside

Outside a PIR, Italian investors pay:

• 26 % capital gains tax on shares and most fund gains (12.5 % on Italian and qualifying government bonds).
• 26 % dividend tax.
• 0.20 % wealth tax (IVAFE / imposta di bollo) on the financial portfolio annually.

Plus inheritance tax (4 % spouse/children, 6 % siblings, 8 % others, with high allowances).

Inside a PIR, after the 5-year holding period:

• Zero capital gains tax on disposals after 5 years.
• Zero dividend tax on dividends accrued inside the PIR.
• Zero inheritance tax on PIR assets passing to heirs.
• The 0.20 % imposta di bollo still applies — the wrapper does not exempt the annual wealth-tax-like charge.

If you withdraw before 5 years: full Italian taxation applies retrospectively — you owe 26 % CGT on gains, 26 % dividend tax on dividends received, plus interest on the late payment. This is the price of the lock-in.

Worked tax math: EUR 30,000 contributed each year for 5 years (EUR 150,000 total), grown to EUR 200,000, withdrawn after the 5-year mark with EUR 50,000 of realised gains:

• Tax inside PIR (post-5y): EUR 0 CGT, EUR 0 dividend tax.

• Imposta di bollo over 5 years: approximately EUR 1,500.

• Tax outside PIR (26 % CGT on gains + dividend tax through period): approximately EUR 13,000-16,000.

PIR advantage on this single 5-year cycle: EUR 11,500-14,500.

For an investor maxing the EUR 200,000 lifetime ceiling and holding 10+ years, the advantage runs into tens of thousands of euros.

Withdrawal Rules

The PIR enforces a strict 5-year hold for tax benefits:

• Withdraw before 5 years from each contribution: tax exemption is lost on that withdrawal — 26 % CGT and 26 % dividend tax apply retrospectively, with interest.
• Each contribution has its own 5-year clock — FIFO accounting in most structures means earliest contributions become "withdrawable tax-free" first.
• After 5 years: full flexibility, tax-free withdrawals on the portion that has cleared the 5-year mark.
• Force-majeure exceptions: some hardship cases (severe illness, etc.) may allow early withdrawal without penalty under specific Agenzia delle Entrate rulings, but these are narrow.

Death and Inheritance Treatment

The PIR carries an especially favourable inheritance regime:

• PIR assets are exempt from Italian inheritance tax (imposta di successione) — full exemption regardless of relationship between deceased and heir, regardless of value.
• The exemption applies to assets held inside the PIR at date of death, provided the 5-year holding period was met (or, in practice for the deceased, the holding-period requirement is generally treated as met at death).
• Heirs receive the assets with no Italian inheritance tax — a major estate-planning benefit for wealthy Italian families.

This is uniquely generous compared to other EU wrappers (the UK ISA, French PEA, and Swedish ISK do not exempt from inheritance/estate taxes in the same blanket way).

After inheritance, heirs can:

• Transfer the assets into their own existing or new PIR.
• Liquidate the assets — at which point standard CGT on any post-inheritance gains may apply, depending on basis treatment.

Comparison to Other EU Wrappers

The PIR is the only major EU wrapper that exempts inheritance tax in addition to CGT and dividend tax — making it a powerful tool for intergenerational wealth transfer in Italy. The trade-off is the Italian-asset concentration mandate (70 % Italian-issuer rule), which limits diversification.

Non-Resident and Leaving-Italy Edge Cases

When you cease Italian tax residence:

• The PIR must be closed — you cannot maintain a PIR as a non-Italian-resident.
• If you close before the 5-year mark, the tax exemption is lost — 26 % CGT and dividend tax apply retrospectively.
• If you close after the 5-year mark for any given contribution, that contribution's tax exemption is preserved.
• Italy does not impose a general exit tax on personal financial portfolios (unlike Norway), but specific situations may trigger taxation.
• Your new country of residence taxes the redeployed assets under its own rules.

For Italians who emigrate (and Polish, German, French citizens who used the PIR while in Italy and then return home), timing the emigration around the 5-year mark for each contribution batch is critical to preserve the tax shelter.

Polish Reader Angle: Can a Polish Resident Use the PIR?

No — you must be Italian tax resident to open a PIR.

Scenarios for Polish citizens:

• Polish citizen working in Italy (Milan tech/finance, Turin auto, Rome public sector, Lombardy logistics) and tax resident in Italy: full PIR access. Useful for any Polish citizen committing to 5+ years in Italy.
• Polish citizen returning to Poland after Italian years: PIR must be closed at exit. Time the return after the 5-year mark for each contribution to preserve the tax exemption. The Italy-Poland DTT applies for any double-taxation relief.
• Polish citizen who never lived in Italy: not eligible.

PIR vs Polish IKE/IKZE:

For Italy-resident Polish citizens, the PIR's EUR 40,000/year annual and EUR 200,000 lifetime ceilings vastly exceed IKE's PLN 26,019/year — and the inheritance exemption is unique. The trade-off is Italian-asset concentration. For permanent Poland residents, IKE + IKZE remain the only option — the PIR is not available, and even if it were, the 70 % Italian-issuer rule would conflict with most Polish portfolio strategies.

Worked Example — 10-Year Scenario

Profile: Italian tax resident, age 35, contributes EUR 20,000/year for 10 years to a PIR-Ordinario via a PIR-compliant Italian asset manager fund.

• Total contributed: EUR 200,000 (reaches lifetime ceiling in year 10).
• Investment: PIR-compliant Italian-equity-heavy balanced fund, assumed 6 % annual total return (slightly lower than global benchmark due to Italian concentration).
• Portfolio value after 10 years: approximately EUR 273,000.
• Gains: approximately EUR 73,000.

Tax inside the PIR over 10 years (assuming all contributions have cleared the 5-year mark by year 10):

• CGT on disposal: EUR 0.
• Dividend tax accrued and paid out tax-free during the holding period: EUR 0.
• Imposta di bollo (0.20 %/year on portfolio value): approximately EUR 2,500 cumulative.
• Net: ~EUR 270,500.

Outside the PIR (regular Italian brokerage, 26 % CGT and 26 % dividend tax):

• Dividend tax each year: ~EUR 1,500-3,000 by year 10.
• CGT at exit on EUR 73,000 gain: EUR 18,980.
• Imposta di bollo: same as PIR.
• Estimated total tax: approximately EUR 28,000-35,000.
• Net: ~EUR 238,000-245,000.

PIR advantage over 10 years: approximately EUR 25,000-32,000 on identical contributions, plus the inheritance exemption optionality. The advantage compounds with longer holding and is more dramatic for higher-tax investors and high-dividend portfolios.

When the PIR Is NOT the Best Choice

The PIR is not always optimal:

• You want global equity exposure. The 70 % Italian-issuer rule fundamentally constrains diversification. A globally diversified ETF is not PIR-eligible. You may underperform global benchmarks during decades when Italy lags.
• You need flexibility before 5 years. Early withdrawal destroys the tax exemption for that contribution. Use a regular brokerage if you may need the money.
• You plan to leave Italy in 3-4 years. You won't reach the 5-year mark for most contributions before exit — the tax exemption is lost.
• You want to hold US shares, crypto, or non-Italian individual stocks. Not PIR-eligible.
• You have already maxed PIR-Ordinario and want more shelter. PIR-Alternativo adds capacity but only for sophisticated investors comfortable with Italian SME concentration risk.

Tracking Wrapper Allowances + Investments Cross-Country

Italian investors often hold a PIR (for Italian-equity exposure) alongside a regular brokerage (for global ETFs), a workplace pension (fondo pensione), and increasingly a foreign brokerage (Degiro, Interactive Brokers). Tracking the EUR 40,000 annual / EUR 200,000 lifetime PIR ceiling, the 5-year clocks on each contribution batch, and the broader portfolio across multiple accounts requires unified visibility. Freenance consolidates multi-wrapper portfolios into one cash-flow view with a Financial Freedom Runway projection — so your PIR + fondo pensione + regular brokerage + foreign accounts stack shows up as a single "months of expenses covered" number, with contribution-batch tax-clock tracking instead of four disconnected spreadsheets.

FAQ

Q: Can I have both a PIR-Ordinario and a PIR-Alternativo? A: Yes. The two envelopes are independent and can be held simultaneously by the same person. Combined annual ceiling is EUR 340,000 and combined lifetime ceiling is EUR 1.7 million.

Q: Can I switch between PIR-compliant funds inside my PIR? A: Yes — switching between PIR-compliant funds within the same PIR is allowed and does not break the 5-year clock (the clock follows the contribution, not the specific fund).

Q: What happens if I exceed EUR 40,000 in one year? A: The Italian broker or asset manager will reject contributions above the cap. If excess somehow occurs, the PIR may lose its tax-favoured status.

Q: Can my spouse and I each have our own PIR? A: Yes — each Italian tax resident individual can hold one PIR-Ordinario plus one PIR-Alternativo. A married couple can therefore shelter up to EUR 80,000 annually in PIR-Ordinarios alone, plus EUR 600,000 in PIR-Alternativos.

Q: Is the inheritance-tax exemption absolute or capped? A: The PIR inheritance-tax exemption is absolute on the assets held inside the PIR at date of death — no cap on the exempt value. This is one of the most generous estate-planning features in Europe.

Q: I'm a Polish citizen working in Milan. Should I use a PIR? A: If you plan to stay in Italy 5+ years, yes — the PIR is one of Europe's most generous wrappers and the inheritance exemption is unmatched. If you may return to Poland within 3-4 years, the 5-year lock-in is the binding constraint and you risk losing the tax shelter. A PIR-compliant fund is the simplest entry point.

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Sources: Agenzia delle Entrate PIR Circular 3/E and subsequent updates, Legge di Bilancio 2017 (introduction), Legge di Bilancio 2023 (cap raise), Testo Unico delle Imposte sui Redditi (TUIR), Italian Securities Markets Authority (Consob) PIR guidance, Italy-Poland Double Taxation Convention.

Informational content, not tax or legal advice. PIR rules and composition mandates are updated regularly by Bilancio Laws. Consult an Italian commercialista or tax adviser before opening, contributing, switching, or withdrawing.