Euro Tax Flash from KPMG's EU Tax Centre

European Commission — Recommendation — Savings and Investment Union — Savings and Investment Accounts — Tax incentives 

On September 30, 2025, the European Commission published its “Recommendation on increasing the availability of savings and investment accounts (SIA) with simplified and advantageous tax treatment” (the Recommendation). The Recommendation is accompanied by a Commission Staff Working Document and a Frequently Aked Questions (FAQ) webpage. Taken together, these documents set out the rationale underlying SIAs, define the objectives pursued, and identify the design principles that the Commission considers to constitute best practice.

The Commission observes that EU households maintain some of the highest savings rates globally but often fail to maximize the return on these savings. A large proportion of EU savings remains in bank deposits which, although secure, typically yield limited returns and do not offer protection against inflation. The Recommendation identifies several factors contributing to this outcome, including low financial literacy, complex investment processes, fragmented financial services markets and limited competition. In the Commission’s view, these barriers reduce citizens’ willingness and ability to invest in capital markets.

By addressing these shortcomings, SIAs are expected to contribute to better financial outcomes for individuals and to wider EU goals. The EC argues that a stronger base of retail investors would provide additional sources of funding for businesses, encourage innovation and job creation, and support the financing of strategic priorities such as the green, digital and social transitions and the strengthening of EU security and defense.

The Recommendation also recalls that Member States have already committed to improving citizens’ access to capital markets in the Eurogroup statement of April 2024 and the European Council conclusions of March 2025. The Commission presents SIAs as a practical instrument to support these commitments.

The Recitals of the Recommendation clarify that SIAs are special accounts offered by authorized financial service providers and that allow individuals to invest in a variety of financial instruments such as shares, bonds and units of collective investment undertakings. The EC also notes that SIAs often include tax advantages and are already in place in some Member States and third countries. According to the Commission, evidence from these jurisdictions shows that well-designed SIAs can make capital markets easier to access, help investors diversify their portfolios and support sustainable wealth creation.

The Recommendation outlines a series of characteristics drawn from best practices. In developing their SIA frameworks, Member States are encouraged to ensure that these best practices are considered. Member States that already have SIA frameworks in place are invited to review and, where appropriate, adapt them with due regard to those characteristics.

Accessibility and possibility to hold multiple accounts

The Commission recommends that accounts be accessible without minimum deposit thresholds or mandatory investment requirements. Member States should permit investors to open multiple SIAs, including with different providers.

Additionally, in the Recitals, the Commission encourages Member States to design SIAs so that they can be used by all citizens, regardless of age or wealth. Access should be possible through both digital and offline channels to ensure inclusiveness. Frameworks are encouraged to promote uptake among young people to foster long-term saving habits and financial literacy.

A wide array of providers

The Recitals of the Recommendation stresses that competition among providers is key to successful SIAs. In the EC’s view, a broad range of authorized financial service providers, including banks, brokers, insurers and investment firms, should be able to offer SIAs. The Recommendation notes that fees should be fair, proportionate and transparent. Providers authorized in one Member State should not face additional barriers when offering SIAs across borders. Facilitating cross-border provision of SIAs is considered essential for innovation and improved offers for investors.

Flexibility: portability and transfers

Investors should be able to switch providers easily. The Recommendation asks Member States to ensure that transfers of portfolios between service providers – whether domestically or cross-border, are streamlined and subject only to limited administrative costs. Moreover, transfer should not trigger a taxable event, so as not to impede the portability of SIAs between providers. The Recitals note that a transfer of a portfolio between providers might be considered a taxable event (e.g. where an existing portfolio is sold and then repurchased with a new provider), and therefore subject to taxation. Member States are recommended to ensure that the transfer of a portfolio of a retail investor between providers, either domestically or cross-border, does not create a taxable event for income tax and does not compromise existing tax benefits, i.e., the tax treatment of the assets in the account should be continued. The Communication notes that this recommendation is without prejudice to the provisions of applicable bilateral tax Treaties, and to Member States’ taxing rights. Member States are, however, encouraged to cooperate to prevent double taxation where investors change residence within the EU.

Large scope of investment opportunities across asset types

SIAs should permit access to a broad range of financial instruments to allow diversification. At a minimum, eligible instruments should include shares, bonds and UCITS, including exchange-traded funds. Member States may extend eligibility to other products, such as European long-term investment funds (ELTIFs) or retail alternative investment funds (AIFs). Providers are encouraged to offer investment options that contribute to EU strategic priorities.

Exclusion of certain types of products

The Recommendation notes that SIAs should exclude investments in highly risky or complex financial instruments, such as certain derivatives or crypto assets not qualifying as financial instruments.

Simplicity and transparency

The Recommendation highlights that SIAs should offer a simple, reliable and secure experience for users. Administrative procedures should be streamlined, and all interfaces should be user-friendly. Costs for opening, operating or transferring accounts should be easy to understand and limited to proportionate administrative charges. Transparency in fees and terms is underlined as essential to building trust and encouraging participation.

Simplified tax compliance

Member States are encouraged to ensure that comprehensive information on the tax treatment of assets held in SIAs is made available in a manner that is easily accessible and understandable for both retail investors and financial services providers intending to offer SIAs.

The Commission acknowledges that the complexity of tax compliance represents a significant barrier for individual investors. To address this challenge, the Recommendation includes provisions for streamlined tax procedures that aim to move the compliance burden from the retail investor and to put it in the hands of the SIA provides. Specifically, the EC recommends that Member States establish a framework enabling SIA providers to offer services such as:

• collecting tax on behalf of the retail investor; and/or
• supplying all relevant data directly to the tax authorities of the Member State where the SIA account holder is tax resident, so that this information can be used to pre-fill the tax return of the retail investor.

The Commission also encourages Member States to permit service providers that are authorized and supervised in other Member States to follow the same tax compliance procedures on behalf of their customers as domestically authorized providers.

Tax incentives

The Commission acknowledges that retail investors may require incentives to open SIAs. The EC therefore recommends that Member States promote their use by increasing the net investor returns, notably through the introduction of tax incentives. Member States are also encouraged to ensure that SIAs and the assets held therein are granted at least the most advantageous tax treatment available domestically for other investment products and accounts.

In this regard, the Recommendation sets out a non-exhaustive list of tax incentives that Member States may consider, including:

• deductions from the taxable base, such as allowing amounts invested in an SIA to be deducted from the taxable income;
• tax exemptions, for example exempting from taxation the income generated by assets held in an SIA;
• tax deferrals, such as deferring the taxation of income generated through an SIA until such income is withdrawn; or
• uniform tax rates, applied to income generated by or the value of assets held in an SIA.

The Recitals of the Recommendation underline that incentives must be simple, well-targeted, aligned with fairness principles, and compliant with EU law, including the free movement of capital and State Aid rules.

Other incentives

Although not specifically included in the text of the Recommendation, the Recitals note that additional non-tax measures may encourage the uptake of SIAs, such as lump-sum payments upon account opening or Member State matching contributions.

Member States are encouraged to conduct awareness campaigns to promote SIAs, explaining their functionality and risks. The EC notes that these campaigns could be integrated with, or complement, broader financial literacy initiatives.

The Recommendation calls for regular monitoring and evaluation of SIA frameworks.

Member States are encouraged to regularly assess the effectiveness of measures taken to implement the Recommendation, particularly with respect to wealth creation and supporting the financing of the European economy. Member States are also encouraged to share best practices regarding the design and tax treatment of SIAs, and to align as much as possible their national criteria for granting tax incentives.

Member States should regularly report on their implementation measures through SIU monitoring processes and as part of the Midterm Review of the Savings and Investments Union strategy, scheduled for publication in 2027. Additionally, the Commission will monitor the implementation of the Recommendation through the European Semester process.

The documents accompanying the Recommendation emphasize the key role that SIAs can play in reinforcing the EU's competitiveness. While there is no requirement for investments held in SIAs to be made in EU assets, the Commission notes that the well documented phenomenon of “home bias”, where investors tend to allocate a large share of their portfolios to domestic markets. Evidence from existing frameworks in the EU and third countries, show that even without formal restrictions, significant proportions of investments remain in national or regional markets. As a result, the Commission expects that SIAs would still contribute materially to the financing of EU companies and strategic priorities. Additionally, the Commission’s related Q&A sets out a best-case scenario for the initiative, noting that increased retail participation in capital markets could raise investment in EU assets by more than EUR 1.2 trillion over ten years.

In preparing this Recommendation, the Commission reviewed various existing schemes within the EU and in third countries to identify and incorporate established best practices. "The Commission Working Staff documents provide details on these frameworks and explain the reasoning behind the selection of features subsequently included in the Recommendation.

The Commission’s FAQ page highlights that SIA frameworks are already in place in several Member States – i.e., Denmark, Estonia, Finland, France, Hungary, Italy, Latvia, Lithuania, Slovakia and Sweden, but notes that their specific features “vary quite significantly”. The Commission also notes that other EU countries have announced plans to introduce similar frameworks starting in 2026. For jurisdictions where SIAs are already established, the Recommendation is intended to equip Member States with tools to refine and improve their national frameworks. Nevertheless, as noted above, Recommendations are not binding on Member States, and the extent to which they will be implemented remains uncertain. Furthermore, several EU Member States are now facing budgetary constraints, which are likely to negatively influence their ability to introduce SIA frameworks. Service providers wishing to offer SIAs will need to monitor closely how these recommendations are implemented at national level.

The potential introduction of tax-efficient investment accounts may present a significant opportunity for asset managers, particularly in attracting retail investors to ETFs and UCITS funds. By developing products that are compatible with these new accounts – featuring user-friendly integration, transparent pricing, and readiness for digital data exchange, asset managers can position themselves to capture increased retail investment flows.

The Recommendation is part of a package of two key initiatives designed to enhance financial literacy and expand investment opportunities for citizens across the EU. The other key initiative — the Financial Literacy Strategy, is specifically targeting the improvement of financial literacy for individuals of all ages and at every stage of life. Its aim is to empower EU citizens to make informed financial decisions by equipping them with the necessary knowledge and skills to manage their finances effectively, save efficiently, and invest in their future. According to the European Commission, data from the 2023 Eurobarometer survey indicates that financial literacy levels within the EU remain low, with fewer than 20 percent of citizens demonstrating a high level of financial literacy. Furthermore, there are considerable disparities in financial literacy rates among Member States. In response to these challenges, the Financial Literacy Strategy outlines a series of measures aimed at increasing financial awareness among all citizens and supporting Member States in their efforts to improve financial literacy. As part of these measures, the Commission and Member States will, among other measures, establish by Q1 2026 a network of “financial literacy ambassadors” to act as trusted advocates, promote financial awareness campaigns, and help connect EU citizens with reliable initiatives at EU level.

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