Italy plans changes to exit tax proposal amid wealth sector backlash
Italy is revising a proposed tax on wealthy individuals who move their tax residence abroad after the measure drew criticism from tax experts and financial advisers. The planned levy is part of the country's 2027 budget package and adds to broader tensions between the government and the financial sector over higher taxes.
Highlights
- Italy plans amendments to the 26% exit tax on unrealised capital gains for individuals with over 800,000 euros moving tax domicile abroad after market backlash.
- Wealth advisers warn the new exit tax could deter affluent clients and undermine Italy's previous favourable tax policies aimed at attracting wealthy residents.
- Intesa Sanpaolo criticises the 5.9 billion euros higher taxes on the financial sector set for 2027, citing potential ECB pressure to cut sovereign debt holdings.
Budget proposal and planned amendments
As reported by Reuters, Economy Minister Giancarlo Giorgetti tells industry lobby groups in Rome that Italy is working on amendments to the proposed exit tax, although he does not provide further details on how the scheme could change.The measure, included in the 2027 budget announced last month by Prime Minister Giorgia Meloni, envisages a 26% tax on unrealised capital gains for individuals with financial investments worth at least 800,000 euros who transfer their tax domicile abroad. People attending the meeting with business associations say the minister signals revisions after the proposal sparked concern among market participants.
Pressure from wealth advisers and banks
Wealth advisers warn that the tax could damage Italy's attractiveness to affluent clients, potentially undermining earlier efforts by previous governments to draw wealthy residents with favourable tax incentives.The debate comes as advocates of wealth taxes point to widening inequality, arguing that top earners continue to accumulate more wealth while real wages remain weak for low- and middle-income workers. At the same time, Italy faces wider criticism from the financial sector over 5.9 billion euros in higher taxes due to affect the industry in 2027.
Intesa Sanpaolo, Italy's biggest bank, strongly criticises those measures on Thursday, saying they could lead the European Central Bank to ask domestic lenders to reduce their exposure to sovereign debt.
We have also analyzed Ibovespa decline driven by political and fiscal uncertainty weighing on Brazilian equities.
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