The term “Riester pension” includes products ranging from insurance policies, savings plans, unit trust agreements and home loan to savings contracts.
The saver invests a certain amount each month and can withdraw capital after retirement. Low-income savers and families with children benefit from the 'Riester' allowances while higher earners benefit from the tax advantages. Under this account, contributions of up to €2,100 can be claimed as a special expense in the income tax return.
Designed for the self-employed and freelancers who are not covered by statutory pension insurance, Rürup'- pension benefits are taxed in the same way as the statutory pension, but initially only partially.
The taxable portion depends on the year in which the pension commences and is fixed for life as a fixed amount. It rises continuously with later years of retirement.
Piano Individuale di Risparmio (PIR)
PIR offers tax incentives to savers investing in small and medium sized Italian companies. It can be sold as mutual funds, discretionary accounts, life policies or security deposit accounts and carries full exemption from 26% income tax if savers stay invested for at least five years.
PIR plans are aimed at retail investors resident in Italy who can invest a maximum of €30,000 per year and up to €150,000 over five years.
At least 70% of assets must be invested in financial instruments (equities or bonds) issued by Italian and/or foreign companies (EU and EEA) permanently established in Italy under the domestic fiscal regime. Of this 70%, at least 30% (or 21% of total investable assets) must be in Italian small and mid caps not included in the main index (FTSE MIB).
Plan d’Epargne en Actions (PEA)
Created in 1992, PEA is a tax-efficient investment wrapper for residents, allowing French investors to buy and sell European securities with preferential conditions.
It is considered as a simplified stock savings plan because a PEA account contains both a securities account and a cash account. The cash account is debited when a security is purchased, and credited when a security is sold or a company pays dividends.
Established in 1818, the product acts as a savings account for French citizens and residents, and the annual returns are not taxed.
As of 2015, only one account may be held by an individual, with an amount from €10 to €22,950.
European ISA (Spanish Compliant Bond)
Spanish compliant investment bonds are tax-efficient, unit-linked platforms for EU regulated funds such as collective investment schemes and unit trusts.
To avail tax benefits on the above, the resident must invest in a tax-saving life insurance bond that contains an element of ‘risk’ and pays out life insurance over and above the plan (around 101%).