TLDR
- Draft Italian legislation introduces a 26% levy on unrealized capital gains for departing residents holding €800,000 or more in financial assets.
- The measure takes effect January 1, 2027, targeting individuals who maintained Italian tax residency for six or more years within the prior decade.
- Taxpayers must settle within 180 days, though EU movers and those relocating to cooperative jurisdictions may postpone by remitting 50% initially.
- Italian government securities receive preferential treatment with a reduced taxable basis, lowering the effective levy to 12.5%.
- Treasury projections anticipate annual receipts of €6.74 million after the system reaches maturity.
Individuals relocating their tax residence from Italy beginning in 2027 may encounter a 26% charge on accumulated but unrealized investment profits. This provision forms part of the budget draft submitted to the Chamber of Deputies on October 30.
Article 17 of the proposed legislation targets those transferring their fiscal domicile abroad while holding assets valued at no less than €800,000—approximately $894,000. The provision would insert Article 307-bis into Italy’s existing income tax code.
Eligibility hinges on maintaining Italian tax residency for a minimum of six years during the decade preceding departure. The framework applies to relocations effective on or after January 1, 2027.
Il Fatto Quotidiano highlighted the departure tax among previously undisclosed budget items. The comprehensive 157-article document emerged two days following the Council of Ministers’ endorsement of the €26 billion fiscal package.
How the Exit Tax Would Work
The levy applies to appreciation accrued prior to relocation. Calculations measure the spread between current market valuations and the original tax basis of each holding.
Covered instruments include equity shares, ownership stakes, marketable securities, and similar financial products, while bank deposits remain excluded. The scope extends to simple partnerships and non-commercial organizations.
Italian government securities benefit from a diminished taxable base of 48.08%, reducing their effective taxation rate to 12.5%—matching the existing treatment of income derived from sovereign debt instruments.
Italy currently imposes departure taxation on corporations and business operators relocating overseas. This legislative proposal broadens that framework to encompass individual investors.
Payment and Deferral Rules
Relocating taxpayers face a 180-day settlement deadline following their departure. Those moving to European Union member states or nations maintaining tax cooperation arrangements with Italy may postpone payment until actual disposition occurs.
Postponement requires an initial remittance of 50% alongside appropriate collateral. Consider a long-term resident transferring to Spain with a €2 million portfolio originally acquired for €1.2 million—the total liability reaches €208,000, with €104,000 payable immediately.
Deferral periods extend up to five years for intra-EU relocations and up to ten years for other qualifying destinations. Tax obligations on unsold holdings expire when these periods conclude, triggering refunds of advance payments.
Unsold holdings also gain exemption upon inheritance transfer or if the taxpayer reestablishes Italian tax residency. Available documentation does not specify which non-EU countries meet qualification criteria.
The framework closely mirrors France’s departure tax structure, employing identical six-of-ten-year residency requirements and the €800,000 threshold. French regulations permit EU deferrals without collateral requirements.
Government technical assessments project initial revenue of €3.37 million in 2027, rising to €6.74 million annually from 2028 through 2031. Net receipts stabilize at €3.37 million yearly from 2032 after accounting for refunds.
Federico Salmoiraghi of OFF Italy Consulting characterized the measure as “poorly defined, leaving considerable room for doubt and interpretation.” He urged authorities to “substantially revise the proposal or withdraw it altogether.”
Available reports do not clarify whether the tax applies to participants in Italy’s flat-rate regime, which charges qualifying newcomers €300,000 annually on foreign-sourced income.
The legislation represents the final budget initiative from Prime Minister Giorgia Meloni’s administration before the 2027 general election. Parliament typically finalizes budget approval by year-end, and legislators retain authority to modify Article 17 before final enactment.
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