The Italian EXIT TAX: What It Is, Who Must Pay It and Why It Sparks Debate

You’ve lived in Italy for years and one day you decide to leave. Suitcases ready, ticket in hand, and right at the door you receive a notice from the tax authority: “Un momento! Prima di andare, dobbiamo fare i conti.” [One moment! Before you go, we need to settle the accounts.] This is the idea behind one of the most discussed fiscal news stories of late 2026: the exit tax, that is, an “exit tax” for those who leave Italy. Attention, however: this is a proposal contained in the new budget law presented at the end of October, which Parliament has yet to approve and which could therefore change. In this guide you’ll see who should pay it, how much, when, why some defend it and others criticise it, and you’ll also learn the Italian vocabulary of taxation, economics and newspaper headlines.

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Why Does the Italian Government Want to Tax People Who Leave Italy?

The exit tax is a measure that exclusively concerns those who leave Italy taking with them a large financial estate, not the tourist, the Erasmus student or someone moving with a normal salary. Understanding it well also means learning an important piece of contemporary Italian: the language of the vocabulary of finance and economics, the language of news programmes, newspaper articles and official letters from the Italian tax agency. A highly topical theme that, for better or worse, is now at the centre of Italian public debate.

What Is the Italian Exit Tax

The name speaks for itself: exit in English means “going out”, tax means an obligatory payment to the state. Exit tax is therefore literally a “tax on leaving”, designed for those who exit Italy from a fiscal point of view. Contemporary Italian taxation language uses many Anglicisms of this type — exit tax, flat tax, spending review — even when there’s an Italian alternative, as the guide on Italian alternatives to Anglicisms explains.

Not an Absolute Novelty: the Exit Tax for Companies

In reality, in Italy the exit tax has already existed for years, but only for companies. It is regulated by article 166 of the TUIR, the Testo Unico delle Imposte sui Redditi [Consolidated Act on Income Tax], that is, the “bible” of Italian taxation. The mechanism is simple: if a company moves its fiscal residence abroad, it pays taxes on the increase in value accumulated in Italy, even if it has sold nothing.

The Real Novelty: the Tax Extends to Natural Persons

With the manovra, that is, the budget law presented by the Government at the end of October 2026, the exit tax would be extended also to natural persons: not only to companies, but also to human beings of flesh and blood (and, while they’re at it, also to simple partnerships and non-commercial entities). The rule is in article 17 of the bill and would enter into force from 1 January 2027, if approved.

Linguistic Curiosity: Persona Fisica and Persona Giuridica

In Italian legal language, a persona fisica [natural person] is simply a human being: you, me, your neighbour. A persona giuridica [legal entity], on the other hand, is an organisation recognised by law, such as a joint-stock company or a recognised association. The distinction is fundamental in law, because legal entities can also sign contracts, pay taxes and be taken to court, despite not being human beings.

The Key Word: la Plusvalenza Latente

Here comes the most interesting and most technical part. The exit tax doesn’t tax all of the estate, but only the plusvalenze [capital gains]. To understand exactly what this means, two key words are needed: plusvalenza and latente.

What Plusvalenza Means

Plusvalenza is the profit you obtain when something you own increases in value. A practical example: you buy shares for 100 euros, today they’re worth 150 euros, your capital gain is 50 euros. Normally, in Italy, you pay taxes on the capital gain only when you sell: when the gain is defined as realised. As long as you don’t sell, however, the capital gain is latent: it exists only on paper.

Why It’s Called Latente

Latente is an adjective of Latin origin meaning “hidden, that exists but isn’t seen”. It’s used in different fields: in medicine one speaks of “una infezione latente” [a latent infection], in psychology of “una gelosia latente” [latent jealousy], in the social sphere of “un conflitto latente” [a latent conflict]. A latent capital gain, therefore, is a potential profit, invisible in practice, that will become real only in the moment when you sell the asset.

How the Mechanism Works with the Exit Tax

With the exit tax, in the moment in which you transfer your fiscal residence abroad, the State acts as if you had sold everything: it calculates the difference between the current market value of your assets and their fiscally recognised cost (in practice, how much you had paid for them), and asks you taxes on that difference. It’s an innovative principle compared to the general rule, because it taxes a gain that has not yet actually been realised.

Who Must Pay It? the Three Conditions

The exit tax doesn’t affect anyone who takes a plane to leave Italy. According to the text presented, three conditions must occur simultaneously. If even just one isn’t met, the tax doesn’t apply. Let’s look at them one by one.

First Condition: Six Years of Residence out of Ten

You must have been a fiscal resident in Italy for at least six of the last ten years before the transfer. This criterion automatically excludes many cases: the Erasmus student who spends a semester in Bologna, the tourist who stays three months, the worker who has been in Italy for just a few years for a professional project. It’s about a deep and lasting fiscal rooting.

Second Condition: the Loss of the Italian Potere Impositivo

The transfer must make Italy lose the so-called potere impositivo [taxing power] (or potestà impositiva [taxing authority]), that is, the right to tax those incomes. In simple terms: the Italian State must no longer have the possibility of taking its share when that asset is actually sold abroad.

Third Condition: 800,000 Euros of Financial Assets

The total value of the assets and rights involved must be at least 800,000 euros. And this is not any type of asset: the tax concerns above all financial assets, that is, shares, holdings in companies, securities and other financial instruments. The house you live in, your car, furniture, personal belongings don’t enter the calculation. For this reason, Italian newspapers often speak of “tassa sui Paperoni” [tax on the Paperoni, that is, on the super-rich].

Curiosity: Who the “Paperoni” Are

In Italian, a Paperone is a very rich person. The word comes from the Italian name of the famous millionaire duck of Disney comics, Zio Paperone [Scrooge McDuck in English], the one who swims in the gold coins of his money bin. When an Italian newspaper writes “la tassa sui Paperoni”, it means “the tax on the super-rich”. It’s a typical nickname of journalistic vocabulary, fun and immediate, used to make news that would otherwise be very technical accessible to the general public.

How Much Do You Pay? the Calculation and a Concrete Example

Let’s now look at the numbers. The aliquota [tax rate], that is, the percentage of the tax, is the one Italy normally applies to financial incomes, with a small exception designed for government bonds.

The 26% Aliquota

The general rate is 26%, the same that in Italy is normally applied to financial incomes such as earnings on shares. The tax isn’t calculated on the total value of the estate, but exclusively on the plusvalenza latente, that is, on the difference between the current value of the asset and the purchase value.

The Exception for Government Bonds

For government bonds (for example the BTP, the famous “Buoni del Tesoro Poliennali”, the Italian equivalent of long-term government bonds), the taxable base is reduced to 48.08%. Doing the math, 26% × 48.08% = approximately 12.5%, which is precisely the reduced rate that in Italy is paid on government bonds in normal conditions. The principle is simple: those who invest in Italian public debt benefit from lighter taxation, and this favourable treatment is maintained also in the exit tax.

A Practical Example: Marco and His Shares

Let’s imagine Marco, who has lived in Italy for 15 years. Years ago he bought shares for 500,000 euros; today those shares are worth 900,000 euros. In 2027 Marco decides to move to Portugal. The following table shows how his exit tax is calculated step by step.

Step	Value
Current value of assets	900,000 euros (exceeds the threshold of 800,000)
Purchase cost	500,000 euros
Plusvalenza latente	400,000 euros (900,000 − 500,000)
Rate applied	26% on the capital gain
Exit tax due	104,000 euros (26% of 400,000)

Two important observations. Marco pays on the 400,000 euros of gain, not on the 900,000 euros total of his estate. And conversely: the threshold of 800,000 euros concerns the value of the assets, not the gain. If Marco’s shares were worth 750,000 euros, he wouldn’t pay anything, even with a huge capital gain.

When Do You Pay and How to Defer the Payment

The mechanism si applica [applies, is applied] not immediately at the moment of the transfer, but within a precise deadline. The proposal also provides a very important possibility of differimento [deferment], that is, postponement of the payment, which opens an interesting plot twist for those who know the mechanism in detail.

The Versamento within 180 Days

According to the text of the proposal, the payment (in technical language the versamento [payment, remittance]) must take place within 180 days from the transfer of residence. Six months of time to gather the sum due, in cases where the tax isn’t deferred.

The Deferment for Those Going to the EU or Collaborative Countries

If you move to a country of the European Union or to a State that has fiscal collaboration agreements with Italy, you can defer the payment until the moment in which you actually sell the assets. In this case, however, you must immediately pay an acconto of 50% [50% down payment] and provide a guarantee. The deferment lasts up to 5 years for those going to an EU country and up to 10 years for those going to other countries with collaboration agreements.

A useful word: acconto [down payment, advance]. An acconto is a part of a payment that you give before, in advance. It’s also used in everyday life: “Per prenotare la sala del matrimonio abbiamo lasciato un acconto” [To book the wedding venue we left a down payment]. Similar is the caparra [deposit], which however has a guarantee function: if you change your mind, you usually lose it.

The Plot Twist: What Happens If the Assets Aren’t Sold

And here’s the plot twist: if during the deferment period you don’t sell the assets, the tax isn’t due and the sums paid in excess are refunded. The same applies if the assets pass to the heirs by succession or if you return to live in Italy before the deadline. Taking up Marco’s example: going to Portugal (EU country), he could immediately pay only half of the 104,000 euros, that is, 52,000 euros, and give a guarantee. The other half he would pay only if he sold the shares within 5 years. And if he didn’t sell them? He wouldn’t have to pay anything, and the State would also return the 52,000 euros already paid.

The Debate: Pros and Cons

Like every new tax, this one has also made people discuss widely. The positions at stake are diverse and articulated: let’s see the main ones, so as to be able to form our own informed opinion and at the same time learn a bit of vocabulary of political and economic debate.

Who Defends the Exit Tax

Those who defend the measure argue that it serves to combat so-called transfers of convenience. Without this rule, a person with a large estate in shares could move their residence to a country with low taxes and then sell everything without paying anything in Italy, even though that value grew during the years lived in the country. Supporters recall also that Italy isn’t an isolated case: various European countries have had an exit tax for natural persons for some time. Germany has had it for decades; France has one with almost identical requirements to those of the Italian proposal: at least 6 years of residence out of the last 10 and more than 800,000 euros in shares or financial instruments.

Who Criticises It

Those who criticise the measure, instead, contest the very principle of taxing unrealised gains and see it as a brake on the free circulation of capital. Some commentators also note a paradox: Italy on one hand tries to attract foreign super-rich people with the so-called “flat tax for new residents” (from 2026 a lump sum of 300,000 euros per year on foreign incomes), and on the other hand taxes those who leave. Others point out that the expected gettito [tax revenue], that is, how much the State will collect, is rather small: according to the Technical Report, about 3.37 million euros in 2027 and 6.74 million per year from 2028 to 2031.

Historical Curiosity: the Lex Horten in Germany

In Germany the exit tax has existed since 1972 and is nicknamed “Lex Horten”, from the name of Helmut Horten, a wealthy German businessman who had moved to Switzerland for fiscal reasons. The rule, born to respond directly to that specific case, has then become a reference model for many other European countries that followed the German example in the subsequent decades.

Italian Curiosity: the “Norma CR7”

The Italian flat tax for new residents also has a nickname. It was born in 2017, when the annual lump sum was 100,000 euros. It became famous in 2018, when Cristiano Ronaldo arrived at Juventus as a new signing, and so Italian newspapers renamed it “norma CR7”, from the footballer’s initials. It’s a typical example of how, in Italy, even laws end up having curious and immediate nicknames, linked to a well-known face or to a news episode.

The Language Corner: Fiscal Vocabulary

The theme of the exit tax offers the opportunity to learn an important piece of contemporary Italian: the journalistic vocabulary of taxation and economics, rich in technical terms, colourful expressions and grammatical peculiarities worth isolating one by one.

The Fundamental Vocabulary

These are the key terms that recur in Italian newspapers when speaking of taxation:

• Il fisco [the tax authority]: the set of offices that collect taxes; in figurative sense, the State when it asks for money. “Il fisco bussa alla porta” [the tax authority knocks on the door].
• La residenza fiscale [fiscal residence]: the country where you pay taxes on your incomes (it doesn’t always coincide with the place where you feel at home).
• La manovra / la legge di bilancio [the budget law]: the great annual law with which the State decides revenues and expenses. In newspapers you’ll also find “la Finanziaria”, the historical name.
• L’aliquota [the tax rate]: the percentage of a tax.
• Il gettito [tax revenue]: the money the State collects with a tax (from the verb gettare, in the sense of “to yield, to produce”).
• Il versamento [the payment]: the payment of taxes, contributions or other sums owed.
• Il patrimonio [the estate]: the set of assets of a person or an organisation.

Idiomatic Expressions about Money

The theme of money is rich in idiomatic expressions worth knowing, because they appear constantly in Italian newspaper headlines:

• Mettere le mani in tasca (a qualcuno) [to put one’s hands in someone’s pocket]: to take money from someone, usually through taxes. “Il governo mette le mani in tasca agli italiani” [the government puts its hands in Italians’ pockets] is one of the favourite headlines of newspapers.
• Pagare il conto [to pay the bill] or presentare il conto [to present the bill]: also in figurative sense, suffer or make someone suffer the consequences of something.
• Chi va via perde il posto all’osteria [who leaves loses their place at the tavern]: a proverb meaning that whoever moves away loses their advantages.
• La fuga dei cervelli [the brain drain]: the emigration of highly qualified people (as the guide on jobs in Italy also recounts). These days people also speak of “fuga dei capitali” [capital flight], that is, money that “escapes” abroad.

The Futuro Semplice in Newspaper Headlines

Have you noticed how many verbs in the futuro semplice [simple future] there are in articles on this news? “La misura si applicherà” [the measure will apply], “Il versamento dovrà avvenire” [the payment will have to take place], “L’imposta non sarà calcolata sull’intero patrimonio” [the tax won’t be calculated on the entire estate]. Italian journalists use the futuro semplice when speaking of a law that is not yet in force: they describe what will happen when the law is approved. It’s a recurring stylistic feature of journalistic language. It’s worth reviewing the endings of regular verbs:

• -are (pagare): pagherò, pagherai, pagherà, pagheremo, pagherete, pagheranno. Verbs in -care and -gare add an h to maintain the hard sound: pagherò, not “pagerò”.
• -ere (vendere): venderò, venderai, venderà, venderemo, venderete, venderanno.
• -ire (partire): partirò, partirai, partirà, partiremo, partirete, partiranno.

And some very frequent irregular verbs in legal texts: essere → sarà; dovere → dovrà; potere → potrà; avere → avrà; rimanere → rimarrà. A small trick: in normative texts you often also find the passivante si with the future: “la tassa si applicherà ai trasferimenti dal 2027” is equivalent to “la tassa verrà applicata ai trasferimenti dal 2027” [the tax will apply to transfers from 2027].

Frequently Asked Questions

Is the Exit Tax Already in Force in Italy?

No. At the moment it’s a proposal contained in the budget law presented by the Government at the end of October 2026. Parliament has yet to discuss and approve it, and during the parliamentary process the rule could also undergo modifications. If approved in the current form, it would enter into force from 1 January 2027. The exit tax for companies, instead, has existed for years and is regulated by article 166 of the TUIR.

Should a Simple Worker Leaving Italy Pay It?

Most probably not. The exit tax applies only if all three conditions are satisfied simultaneously: at least six years of fiscal residence in Italy over the last ten, loss of Italian taxing power and an estate of at least 800,000 euros in financial assets (shares, securities, holdings). A worker with a normal salary, a house and some savings in a current account is almost certainly outside the scope of application.

What Is the Difference between Plusvalenza Latente and Plusvalenza Realizzata?

The plusvalenza realizzata [realised capital gain] is the actual profit you obtain in the moment in which you sell an asset that has increased in value. Example: you buy shares at 100 euros and sell them at 150, the realised capital gain is 50 euros. The plusvalenza latente, instead, is the potential profit of an asset you still own but that has increased in value. In theory it’s worth 50 euros, but as long as you don’t sell it’s just a figure “on paper”. The exit tax, in an innovative way, taxes precisely latent capital gains.

Do Similar Taxes Exist in Other European Countries?

Yes, and this is one of the main reasons cited by supporters of the measure. Germany has had an exit tax for natural persons since 1972, nicknamed “Lex Horten”. France has one with almost identical requirements to those of the Italian proposal: at least 6 years of residence out of the last 10 and more than 800,000 euros in shares or financial instruments. Other European countries also provide analogous forms, with different thresholds and rates. Italy wouldn’t therefore be a pioneer, but would follow a European model already consolidated.

Why Is the Law Called “Exit Tax” Instead of “Tassa d’Uscita”?

Because contemporary Italian fiscal vocabulary uses many Anglicisms, that is, English words, even when a perfect Italian alternative exists. Exit tax, flat tax, spending review, welfare, stakeholder are all examples of this phenomenon. Some linguists see in this use a sign of modernity and international openness, others criticise it as an impoverishment of the Italian language. In any case, English fiscal terms are now an integral part of the language of newspapers, public offices and Italian political debate, and it’s useful to know them.

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Exercise: The Exit Tax and Tax Vocabulary

Test on the tax and economics vocabulary around the exit tax. Check the key words, from capital gain to revenue. Free exercise for students of Italian.

Question 1 of 10

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