Borsa Italiana: tax incentives to encourage greater investment in shares
Savings accounts with low minimum withdrawal thresholds, extension of the IPO bonus, tax relief for recapitalisations: proposals from Assonime and the Stock Exchange
In recent years, there has been a surge in efforts by institutions and market participants to revitalise the capital market. There has been the manifesto for the development of the capital market in Italia, initiatives such as the fund of funds – managed by CDP – aimed at listed SMEs, regulatory simplifications and the reform of the Consolidated Law on Finance (TUF); yet new listings on the Milan Stock Exchange remain scarce and savers are still investing far too little in shares. Direct investment in shares by Italian households, as a percentage of GDP, is in fact among the lowest in Europe, whilst, by contrast, investment in bonds – particularly government bonds – is much higher than elsewhere.
Assonime (the association of public limited companies) and Borsa Italiana have therefore set to work to try to draw up a series of concrete proposals to ensure that resources and the real economy find common ground on the stock market, with a view to guiding the behaviour of savers and businesses, which is currently heavily influenced by a culture of debt – a practice that, incidentally, enjoys tax incentives. For this reason, the proposals drawn up focus on tax matters, in the hope that they may be incorporated into a forthcoming budget bill, sooner rather than later.
The highlight of the proposals is the savings and investment accounts, which have been the subject of an EU Recommendation (SIA, i.e. Savings & investments accounts) and are therefore the subject of debate in all Member States wishing to follow the Swedish example: by introducing this type of tax-advantaged account, Sweden has, over the course of some fifteen years, made investing in shares almost as popular as investing in government bonds here in Italy.
The Assonime-Borsa study suggests two approaches to tax treatment. The simplest involves applying a minimum tax (set at 0.7 per cent per annum) on the average value of the investment, which would allow all other forms of taxation to be avoided, for example on capital gains or dividends, whilst also exempting the accounts from inheritance tax, as is already the case today for BoT and BTp.
In order to benefit from the tax simplification, these accounts, according to the proposal, would need to be invested – either directly or indirectly via funds – for at least 70 per cent in Italian and European shares and have amounts suitable for savers: up to 50,000 euros in the first year, with an additional 20,000 euros for each subsequent year, up to a maximum of 200,000 euros, with no time limits on the duration of the investment. The intermediary would also be responsible for managing the account for tax purposes. A tax-free ‘allowance’ is proposed for the first €10,000 of investment, rising to €20,000 for young people aged 35 and under.
