MILAN – A tax on financial capital gains for wealthy individuals leaving the country. This is not about companies or entrepreneurs, for whom rules on moving assets out of Italy are already in place, but about private individuals with investment portfolios worth at least €800,000. The government is now considering raising that threshold to €5 million, substantially narrowing the number of taxpayers affected. The new measure appears in Article 17 of the budget bill approved by Giorgia Meloni's government and now before Parliament, where amendments are already being discussed, including at the urging of members of the prime minister's own governing coalition.
The budget bill introduces a tax on financial income accrued while an individual was resident in Italy for tax purposes. To be liable, the person must have lived in the country for at least six of the ten years preceding their departure.
The proposed rate is 26%, applied to capital gains – the difference between the purchase price and the current value of financial assets – even when those gains are still unrealised because the investments have not yet been sold.
For government bonds, the taxable base is reduced to 48.08% of the gains, preserving their preferential effective tax rate of 12.5%.
Two conditions must be met for the exit tax to apply: the total value of the financial assets held, including shareholdings, securities and other financial instruments, must be at least €800,000; and the taxpayer must have been resident in Italy for at least six of the ten years before transferring their tax residence abroad.
The government is now considering revising the measure
Under the revision now being considered, the €800,000 threshold could rise to €5 million. The aim is to target wealthy individuals who move abroad to sell their investments and take advantage of more favourable tax regimes, rather than people with smaller investment portfolios. The proposed change has not yet been approved.
Payment is due within 180 days of transferring tax residence abroad.
However, anyone moving to another EU country, or to a country that has a tax cooperation agreement with the Italian authorities, can request a deferral of payment until the assets are sold, provided they make an advance payment equal to 50% of the tax due and provide an appropriate guarantee.
In other words, half the tax must be paid immediately, with the balance becoming payable when the investments are sold.
For those moving within the EU, the deferral lasts five years; for those relocating to another country with a tax cooperation agreement, it lasts ten years.
If the securities are not sold during that period, meaning the capital gains are not realised, the tax is no longer due and any advance payments must be refunded.
This is one reason why the government's technical assessment uses a series of cautious estimates. Starting from potential exit-tax revenue of €13.47 million, it assumes that only 50% can be collected as an advance payment, reducing expected annual revenue to €6.74 million. For 2027, the figure falls to €3.37 million to account for the 180-day deadline for payment following a change of tax residence. The assessment then assumes that half the advance payments may have to be refunded because the relevant capital gains are not realised within the statutory period. This would produce a negative fiscal impact of €3.37 million a year once the five-year deferral period applicable to moves within the European Union expires.
In practical terms, projected revenue starts at €3.37 million in 2027, rises to €6.74 million annually from 2028 to 2031, and then falls back to half that amount from 2032 onwards.
These estimates are based on the original €800,000 threshold and could change if the government decides to raise it to €5 million.
Tax incentives to attract the wealthy
These are hardly astronomical sums in the context of a budget worth more than €26 billion. But their symbolic significance is considerable.
After years spent trying to attract foreign wealth and bring skilled professionals back to Italy, some industry specialists see the proposal as a potentially troubling signal to wealthy international taxpayers.
Over the years, Italy has introduced two main incentives to attract them.
The first is a preferential tax regime for workers moving to Italy who commit to maintaining their tax residence in the country for four years. Broadly speaking, it halves their taxable income, up to an income ceiling of €600,000.
The second is a favourable tax regime for new residents – wealthy individuals moving to Italy who can opt to pay a flat annual tax on income earned abroad.
Originally set at €100,000, that annual payment was subsequently raised to €200,000 and then €300,000.
The government is now considering explicitly exempting beneficiaries of this preferential regime from the exit tax if they subsequently move their tax residence abroad. The aim is to avoid a contradiction: attracting wealthy foreigners to Italy with favourable tax incentives, only to penalise them when they decide to leave. The exemption, like the higher €5 million threshold, is still under discussion.
Renzi's attack
It is no coincidence that former prime minister and current senator Matteo Renzi recently launched a fierce attack on social media. “What madness!” he wrote, sharing a Financial Times article reporting the concerns of tax lawyers and advisers to wealthy clients. “Giorgia Meloni is destroying a decade's work to attract investment with a populist measure. Absurd.”
Amendments remain possible as the budget bill makes its way through Parliament. The government's latest proposals appear to address some of the concerns raised within its own coalition, although no final decision has been taken. Among those calling for changes is Stefania Craxi, daughter of former Italian Prime Minister Bettino Craxi and leader of Forza Italia’s group in the Senate. Her party is part of Meloni's governing coalition.
“Only gains accrued in Italy should be taxed,” she argues, setting out a series of proposed changes. “The value of assets when someone first arrives in the country should be used as the starting point, as already happens with companies.
“The promise made to those who opted for the new-residents tax regime must be honoured, because a credible state does not change the rules halfway through the game.
“And the mechanism must be brought fully into line with EU rules, allowing a complete deferral for anyone moving to another EU country, without the 50% advance payment or the requirement to provide a guarantee – provisions that, as they stand, may not withstand scrutiny by the European Court of Justice.”