Exit tax: how the anti-capital flight measure in the budget works and how it might be amended

Leaving the country will come at a cost, but only for those with assets worth over 800,000 euros. The budget introduces, from 2027, a tax on financial gains that have accrued but not yet been realised by those who transfer their tax residence abroad. At the time of departure, shares, bonds, funds and other financial instruments are treated as if they had been sold on 31 December of the previous year, and a 26 per cent tax is applied to the capital gain, which is reduced to an effective 12.5 per cent for government bonds. The aim, as stated in the explanatory report, is to ‘preserve the State’s taxing rights’ over income generated whilst resident in Italia.

There are two conditions, both of which must be met: at least six years’ residence in the last ten years and financial assets worth at least 800,000 euros. The threshold relates to the value of the assets, not the income, and property is excluded. The tax must be paid within 180 days. Anyone moving to an EU country, or to a non-EU country with agreements on the exchange of information and tax collection, may defer payment until the property is actually sold, but must pay a 50 per cent advance immediately and provide security.

If, within five years – or ten years outside the EU – the securities are not sold, the tax is not due and the advance payment is refunded; the same applies in the event of death or return to Italia. Anyone selling the securities pays tax on the lesser of the capital gain calculated at the time of departure and the capital gain actually realised.

The levy will yield little for the public purse. The technical report estimates 3.37 million in 2027 and 6.74 million per year from 2028, with refunds expected to total 3.37 million per year from 2032. The calculation is based on the 6.58 billion paid in 2025 as a substitute tax on capital income and capital gains, applied only to the portion of financial wealth exceeding 800,000 euros (73.1 per cent) and to the proportion of residents who emigrate each year (0.28 per cent).

The legislation is already set to change. Forza Italia, led by its Senate president Stefania Craxi, says it agrees with ‘the rationale’ behind it but is calling for ‘three amendments’. The first: ‘Only assets accrued in Italia should be taxed’, taking the value of the assets on arrival as the reference point. The current text calculates capital gains on the basis of the original purchase price and therefore also applies to gains realised before moving to Italia, whilst the technical report describes the tax as a levy on income ‘realised during the period of residence’.