Moving abroad could become more expensive, at least for those with significant financial assets. Among the new features of Budget law 2027 in fact a new one appears exit taxa tax intended to target financial capital gains accrued in Italy by those who decide to move their tax residence across the border.
The principle is simple, but the consequences could be significant: the State could ask for the payment of taxes on some earnings accrued during the stay in Italy, even when the investments have not yet been sold and the profit has not actually been collected.
However, the measure, contained in article 17 of the budget bill, has already raised doubts among tax experts, consultants and investors. So much so that the government has said it is willing to change it. Among the hypotheses under study is raising the capital threshold from 800 thousand to 5 million euros.
The new tax is not yet law: the text is being examined by Parliament and could change before final approval.
What is the 2027 exit tax and how does it work
The exit tax, literally “exit tax”, is a fiscal mechanism designed to prevent the transfer of residence abroad from subtracting earnings accrued when the taxpayer resided in the country from Italian taxation.
The novelty of the maneuver mainly concerns natural persons who do not carry out business activities, while forms of exit taxation already exist for companies.
The mechanism is based on the so-called latent capital gainsi.e. increases in the value of investments that have not yet been transformed into an actual profit.
For example, someone who purchased financial instruments for 800 thousand euros and today owns a portfolio worth one million has accrued a theoretical capital gain of 200 thousand euros. Even without having sold anything, under the new legislation you could be required to pay tax on that profit.
This is precisely one of the most discussed aspects of the proposal: the taxpayer may have to pay money to the tax authorities without having yet achieved the necessary liquidity through the sale of investments.
Who has to pay the new tax to move abroad
Not everyone leaving Italy would be affected by the exit tax. The bill identifies some precise conditions.
The new tax would be triggered for those who maintained the tax residence in Italy for at least six of the last ten tax periods prior to the transfer and possesses financial assets relevant for the purposes of the law for a total value of at least 800 thousand euros.
Another fundamental condition is that, following the transfer, Italy loses the right to tax the related income.
The provision therefore mainly concerns those who hold high-value investment portfolios, company shares and other financial instruments.
The limit of 800 thousand euros does not necessarily refer to the entire personal assets. It doesn’t mean, for example, that owning a house of that value automatically triggers the tax.
And it doesn’t even mean that the 800 thousand euros constitute a deductible: the threshold is used to identify the taxpayers involved, while the taxation is calculated on the capital gains accrued relating to the activities involved.
For those who move abroad for work, study or family reasons without owning investments of this size, the new tax would not be triggered.
How much you pay: the 26% rate and capital gains calculation
According to the text currently envisaged, the tax is calculated by applying the ordinary rates to the financial capital gains involved.
For many investments the reference rate is 26%while for some categories, such as Italian and equivalent government bonds, the preferential treatment corresponding to 12.5% is applied.
To understand the possible economic impact, an example is enough. An investor who owns financial instruments purchased for 800 thousand euros and now valued at one million, with a latent capital gain of 200 thousand euros entirely subject to the 26% rate, could find himself having to pay 52 thousand euros.
A sum which, in the absence of deferral mechanisms, would have been due even without having sold the financial instruments.
In fact, the bill provides, as a general rule, for payment within 180 days of losing Italian tax residency.
Can payment of the exit tax be deferred?
The text of the maneuver introduces some mechanisms to mitigate the immediate impact of the levy.
Those who transfer their tax residence to a European Union country, or to certain states that guarantee adequate tax cooperation and assistance in collection, may request to defer payment until the investments are sold.
However, it would not be a completely free suspension: it would be necessary to pay a fee advance payment equal to 50% of the tax and present an appropriate guarantee.
The deferral would last five tax periods for transfers in the European Union and ten in other eligible countries.
An important element concerns investments that are not sold during this interval: according to the proposal, in the presence of the envisaged conditions, the tax would no longer be due on those assets, with the excess sums paid being returned. Cases of inheritance and return to Italian tax residence are also regulated.
The government could raise the threshold from 800 thousand to 5 million
The most important part of the debate now concerns possible changes to the provision.
After the criticism received, the Deputy Minister of Economy Maurizio Leo confirmed the government’s willingness to review the mechanism of the new tax.
One of the hypotheses that emerged is that of raise the asset limit from 800 thousand to 5 million eurossignificantly narrowing the range of interested taxpayers.
A possible exclusion of new residents arriving in Italy benefiting from the preferential tax regime on foreign income is also being evaluated.
The problem raised by consultants and experts concerns above all the risk of compromising Italy’s fiscal attractiveness for international investors. Particularly onerous exit taxes could discourage those who are considering moving to the country, especially if they fear having to incur high costs when they decide to leave again.
On the other hand, the declared purpose of the provision is to protect the right of the State to tax earnings accrued during Italian residence, preventing a subsequent transfer from making the withdrawal impossible.
The possible raising of the threshold to 5 million remains, for the moment, a hypothesis and not an approved change.
When would the new tax come into force?
If approved in its current formulation, the new exit tax would apply to taxpayers for whom the loss of Italian tax residency becomes effective starting January 1, 2027.
The date is particularly important for those who are planning a move abroad, because the regulations refer to the loss of tax residence and not simply to the day of departure or change of address.
Furthermore, some application aspects remain to be defined, which will have to be specified by a subsequent decree of the Ministry of Economy and Finance.
For the moment, therefore, leaving Italy does not automatically entail the payment of a new tax. The 2027 exit tax remains a proposal aimed at specific categories of taxpayers, the scope of which could change during the parliamentary examination.
The definitive text of the maneuver will establish who will have to pay it, on which investments and in what ways.
