Italy’s budget bill would extend its exit tax to private individuals

Italy’s 2027 budget bill would tax the unrealised gains of an individual who moves their tax residence abroad. Article 17 would apply to moves taking effect from 1 January 2027, and only to people resident in Italy for at least six of the ten preceding tax periods who hold relevant assets worth at least €800,000. The Council of Ministers approved the bill on 28 October; Parliament has not voted.

For a Vietnamese family, the six-of-ten test counts tax periods of Italian tax residence, not the type of permit. The explanatory report names no countries that qualify for deferred payment, so it does not say whether Vietnam is one of them.

What Article 17 would add

The Government’s explanatory report to the bill says Article 17 inserts a new Article 307-bis into Italy’s income tax code (Legislative Decree 117 of 19 June 2026). Il Fatto Quotidiano and Milano Finanza describe the change as extending to individuals an exit tax that Italy already applies to companies.

The tax would fall on financial income that accrued during Italian residence and has not been realised when residence moves abroad, but only where Italy would lose the right to tax it. Income Italy keeps the right to tax, including under tax treaties, stays outside the charge.

Two conditions must be met together. The person must have been tax-resident in Italy for at least six of the ten tax periods before the move, and the relevant assets and rights must have a combined value of at least €800,000 on the last day of the tax period before the one in which residence ends.

The threshold is a test on total value, not on gains. Il Sole 24 Ore describes the assets as shares, equity interests and other financial instruments, excluding bank deposits.

The report ties the charge to financial income, and its section on Article 17 mentions neither property nor the location of the assets. The same rules would reach simple partnerships and non-commercial entities.

The base is the sum, asset by asset, of the positive differences between each asset’s value on that reference date and its tax cost. An asset showing a loss adds nothing to the base and does not reduce it.

The report’s section on Article 17 states no rate. Il Fatto Quotidiano attributes an ordinary rate of 26% to the technical report, and Il Sole 24 Ore and Il Messaggero give the same figure. For the bonds and other securities the provision lists, only 48.08% of the gain counts, which the report says preserves parity with the 12.5% rate normally applied to them; 12.5 divided by 26 is 0.4808.

Payment, deferral and when the tax falls away

The tax is due within 180 days of the date residence ends. A person moving to an EU member state, or to a non-EU state or territory with which agreements are in force for an adequate exchange of information and for mutual assistance in recovering tax claims, of a scope similar to Directive 2010/24/EU, may instead opt to defer payment.

The option requires an advance of 50% of the tax within the ordinary term and an adequate guarantee, including for an EU destination. Deferral runs for five tax periods after the one in which residence ends for an EU destination and for ten for other qualifying states: 2028 to 2032 or 2028 to 2037 for a move taking effect in 2027.

If the assets are later sold for consideration, tax falls on the lesser of the gain accrued at departure and the proceeds minus cost. No tax is due when proceeds are below cost, and gains after departure are outside the charge. Gifts, and transfers to relatives or to the controlled companies and entities that the provision identifies, are taxed on the full accrued gain.

Tax is also not due on assets not sold within the deferral window, on assets passing on death within it, or if Italian tax residence resumes within it, and any excess paid is refunded.

France’s exit tax uses the same six-of-ten and €800,000 figures. According to the French tax authority’s 2026 filing notice, France defers payment automatically for moves to the EU and to listed states and asks for a guarantee only elsewhere, whereas Italy’s draft asks for an advance and a guarantee even for an EU destination.

How the figures work

The table applies the report’s rules and the reported 26% rate to invented portfolios. These are arithmetic illustrations, not cases.

As the report describes the mechanism, neither the threshold nor the base includes an allowance: once assets reach €800,000, the tax applies to the whole of the gains.

What it would mean for Vietnamese investors and families

The tax would reach a Vietnamese national only through Italian tax residence, counted in tax periods; a visa or permit does not decide it. Someone tax-resident for every full year from 2027 would have five resident periods at the end of 2031 and six at the end of 2032.

On that count, a move taking effect in 2033 would be the first preceded by six, if the year of the move itself does not count. The report does not say how a partial year counts.

Italy also operates an Investor Visa and a flat-tax regime for new residents, which charges €300,000 a year on foreign income. The report’s section on Article 17 mentions neither, so whether and how the draft would apply to people under them is not stated.

A move taking effect in 2027 would be valued on 31 December 2026, the day before the budget law is due to take effect. This means the value of the assets and their tax cost on that date would fix both the threshold test and the base for any 2027 departure.

Whether Vietnam is a state to which Italy would allow deferral is not stated. The report defines the category by the content of agreements and leaves the detail to a ministerial decree.

The 1996 agreement between Italy and Vietnam, in force since 20 February 1999, has an article on the exchange of information, but none of the 30 articles in the English transcription published by Vietnam’s General Department of Taxation covers assistance in collecting taxes.

Both countries are parties to the multilateral Convention on Mutual Administrative Assistance in Tax Matters, in force for Vietnam since 1 December 2023. If Vietnam did not qualify for deferral, the ordinary rule would apply: payment within 180 days of leaving, without the option of a 50% advance.

The charge applies only where Italy loses the right to tax. Under Article 13 of the 1996 agreement, as transcribed, gains on shares of at least 25% of a company’s capital may be taxed in the company’s state, and gains on any other property only in the seller’s state of residence.

On a plain reading, a minority shareholding or a fund holding falls in the second group. This means that once a former Italian resident becomes tax-resident in Vietnam, the agreement would leave the right to tax such gains to Vietnam.

Where the bill stands

The Council of Ministers approved the bill on 28 October, according to its press release, which does not mention the exit tax. Il Fatto Quotidiano listed the extension among the measures not announced when the 157-article text emerged on 30 October.

Sky TG24 reported that the bill was sent to the Chamber of Deputies on 30 October. It puts hearings from 5 to 12 November and lawmakers’ amendments by 17 November, a date it calls provisional. It adds that the budget must be approved by 31 December or provisional budgeting follows.

The technical report, as reported by Il Messaggero, expects the tax to raise €3.37 million in 2027, €6.74 million a year from 2028 to 2031 and €3.37 million in 2032. Milano Finanza reports a gross potential of €13.47 million before advances and possible refunds.

What this article has not established

The bill’s articles and the technical report were not read in the original, because camera.it refused automated access. The explanatory report was read in a copy published by the news agency AGEEI. The 26% rate and the revenue figures come from press reports of the technical report.

The explanatory report’s section on Article 17 names no list of qualifying non-EU states, no content for the guarantee, and no treatment of realised losses carried forward. It does not say how a partial year counts toward the six, how the six-of-ten test applies to entities, or whether the loss of the right to tax is tested asset by asset.

Whether Vietnam qualifies for deferral, whether it has reserved its position on assistance in recovery, and whether it would credit an Italian exit charge on gains that the agreement allocates to Vietnam were not established. The agreement was read in a transcription, not the authentic text, and its protocol, if any, was not seen.

No Government or ministerial statement on Article 17 was found.