Italy introduces 26% exit tax on wealthy individuals leaving the country

Italy’s 2027 Budget Bill proposes a new exit tax on financial assets held by wealthy individuals and entities transferring their tax residence abroad, targeting unrealised gains accumulated while living in the country.

The measure applies to individuals, unincorporated partnerships and non-commercial entities holding financial assets worth at least €800,000, excluding bank deposits. Those affected must have been Italian tax residents for at least six of the previous 10 years.

The tax will be levied at 26% on financial income and capital gains accrued up to the date of departure, even if investments have not been sold. Government bonds benefit from a reduced taxable base of 48.08%.

Payment is generally due within 180 days of changing tax residence. However, those moving to another EU member state or a cooperating country may defer payment until assets are sold, subject to paying half the tax upfront and providing security.

The deferral applies for up to five years for EU moves and 10 years for eligible non-EU countries. If assets remain unsold beyond the applicable period, or the taxpayer returns permanently to Italy, the tax will not be due and provisional payments will be refunded.

The government estimates annual gross revenue of €6.74 million once fully operational, with €3.37 million expected in 2027. Potential refunds could reduce the long-term net revenue.

via FT