Italy Exit Tax 2027: New Rules for Individuals Moving Their Tax Residence Abroad
Article 17 of the Draft 2027 Italian Budget Law proposes the introduction of a new exit tax on unrealised capital gains arising from certain financial assets, applicable to individuals transferring their tax residence from Italy to another country.
The proposed measure, expected to apply to transfers of tax residence effective from 1 January 2027, would apply where all the following conditions are met:
- the individual has been an Italian tax resident for at least 6 of the 10 tax years preceding the transfer;
- the total value of the financial assets concerned is at least EUR 800,000;
- the transfer results in Italy losing its right to tax the relevant income.
How Would the New Italian Exit Tax Be Calculated?
The tax would be determined on the sum of the positive differences between the fair market value of each individual financial asset, measured as at the last day of the tax year preceding the loss of Italian tax residence, and its corresponding tax basis.
The wording of the proposed provision would therefore appear to prevent the offsetting of unrealised capital gains against unrealised capital losses arising from other investments.
The tax would be payable within 180 days. However, for transfers to EU countries or non-EU countries with adequate tax cooperation agreements, payment could be deferred for 5 or 10 tax years, respectively, subject to an initial payment of 50% of the tax and the provision of a guarantee.
The proposal also provides that, where the relevant financial assets are not disposed of within the applicable deferral period, the exit tax would no longer be payable, with a corresponding right to a refund of amounts already paid, including the initial 50% payment, subject to the conditions set out in the proposed legislation.
Italy’s Proposed Exit Tax and the New Residents Flat Tax Regime
The proposed exit tax has not yet been enacted into law. The Draft 2027 Italian Budget Law has been submitted to Parliament, and the legislative process remains ongoing. The provision may therefore be amended or removed before the final approval of the Budget Law, expected by the end of December 2026.
Certain aspects of its interaction with existing Italian tax legislation also remain to be clarified, particularly with the flat-tax regime on foreign-source income available to new Italian tax residents under Article 24-bis of the Italian Income Tax Code (TUIR).
Applying the proposed exit tax to individuals benefiting from this regime could give rise to interpretative issues and potential overlapping taxation, particularly in relation to unrealised capital gains on foreign financial assets already falling within the scope of the flat-tax regime.