Lesson 7.3 · 3 of 5 · Tax, pensions and protection where you live
Tax-free investment accounts in the EU: what to check in your country
Some EU countries offer accounts or bonds that cut the tax on investing, but each one is national, with its own limits and rules. Examples are France’s PEA and Italy’s bonds for individual savers. In 2025 the European Commission recommended that every country offer a savings and investment account; whether yours does is up to your government.
Terms in this lesson
- Government bonds
- Loans you make to the government, for a fixed interest rate.
- ETF
- A fund listed on the stock exchange that buys dozens or hundreds of companies at once.
- UCITS
- The European label for funds that follow EU investor protection rules.
Opening question
In September 2025 the European Commission recommended savings and investment accounts across the EU. What does that mean for you today?
A Commission recommendation does not bind countries. It describes what a good account should look like; each government decides whether to create one and how to tax it.
It does not matter if you get it wrong: trying first helps you remember.
Government bonds for individual savers in the EU
Definition
What is a retail government bond?
A government bond sold directly to ordinary savers.
Some governments issue bonds meant for households, often with small minimum amounts and no dealing fee. Italy, for example, issues bonds reserved for individual savers, such as BTP Valore and BTP Italia Sì. Other countries have nothing similar, and you buy ordinary government bonds, or a bond ETF, through a broker. The tax on the interest varies: some countries tax government bond interest at a lower rate or not at all, others treat it like any other interest.
Myth or fact?
“Government bonds sold to households are always tax-free.”
Myth. Some countries tax the interest at a lower rate or exempt it, but others tax it like any other interest. Check the issue’s terms and your tax authority’s rules.
Tax-advantaged investment accounts: PEA, SIAs and others
Several EU countries have an account in which investments grow with less tax, provided you follow its rules. They work quite differently, so here is one example in detail.
Example
Example: France’s PEA
Up to €150,000 paid in, and no income tax on gains after 5 years.
The plan d’épargne en actions holds mainly shares of European companies and funds that invest in them. Keep it 5 years, and gains you take out are free of income tax, though social levies (18.6% in 2026) still apply. Take money out earlier, and the gain is taxed at 12.8% plus social levies, and the plan is normally closed. The ceiling counts only what you pay in, not the growth. Each person may hold one, and only residents of France can open it.
France, checked on 29 October 2026 (Service-Public.fr).
Compare
France in 2026, as an example. You take out a €10,000 gain after more than five years. Assume the whole gain is taxed at 2026 rates: 12.8% income tax and 18.6% social levies. Which leaves you more?
The PEA: €1,860 of tax against €3,140, so you keep €8,140 instead of €6,860. The price is the rules: a ceiling, a limited list of assets and the five-year wait.
| Feature | Ordinary account | Tax-advantaged account |
|---|---|---|
| Tax on gains | each year you sell at a profit | lower, deferred or none, if you follow the rules |
| Limits | none | a ceiling on what you pay in |
| What you can hold | almost anything the broker offers | a set list, often shares, bonds and UCITS funds |
| Taking money out | any time | too early can cost the tax advantage |
| Moving abroad | the account usually stays | the advantage may end |
Definition
What is an EU savings and investment account?
A model the EU recommends, not an account you can open.
On 30 September 2025 the European Commission adopted Recommendation (EU) 2025/2029. It asks countries to offer simple accounts for shares, bonds and UCITS funds, with no minimum to open, fair and clear fees, transfers between providers without a tax bill, and favourable, simple taxation. It does not bind governments. Some countries already have accounts like this; others may create or change one, so check what yours has announced. The PEPP, a personal pension with EU-wide rules, is covered in the next lesson.
Work it out
France’s PEA in 2026 has a €150,000 ceiling on payments in. You have paid in €120,000 and your investments are now worth €160,000. How much more can you still pay in, in euros?
This exercise is in the free account, where we also save your progress.
Create a free accountHow to use a tax-advantaged account
Match the terms
Match each rule of a tax-advantaged account with what it means.
This exercise is in the free account, where we also save your progress.
Create a free account- Does my country have one?Look on your tax authority’s or finance ministry’s website for accounts with a tax advantage on shares or funds.
- What is the ceiling?Yearly or for life, and whether growth counts.
- How long must I hold?And what an early withdrawal costs.
- What can I hold inside?Shares, ETFs, bonds, or only certain markets?
- What if I move abroad?Many accounts lose their advantage when you stop being tax resident.
What would you do?
You can invest €200 a month, either in an ordinary account or in your country’s tax-advantaged account, where the full advantage starts after five years. What do you do?
This exercise is in the free account, where we also save your progress.
Create a free accountWhat you learned
- Tax-advantaged accounts and savings bonds are national: each has its own ceiling, holding period and rules.
- France’s PEA, for example, accepts up to €150,000 of payments and frees gains from income tax after 5 years, though social levies remain.
- The EU’s 2025 recommendation on savings and investment accounts does not bind countries; check what yours offers.
You reached the end
Keep what you learned
With a free account we remember your lessons, bring back the questions you got wrong exactly when you need them and keep your streak.
Save your progress with a free accountLessons are educational. They are not a recommendation to buy or sell. Investing involves risk and you can lose money. Sources: European Commission (Recommendation (EU) 2025/2029 on savings and investment accounts, 30 September 2025); France’s Service-Public.fr (Plan d’épargne en actions, checked 22 May 2026; taxation of the PEA, checked 15 April 2026); Italy’s Ministry of Economy and Finance (BTP Valore and BTP Italia Sì); all checked on 29 October 2026.