Italy’s Proposed Exit Tax: What It Could Mean for Wealthy Residents Considering Malta

Executive Summary

Italy’s proposed exit tax marks a potentially significant development for internationally mobile individuals who have made the country their home. Included in the draft 2027 Budget, the measure would introduce a charge on certain unrealised financial gains when qualifying residents transfer their tax residence abroad. Although the proposal remains subject to parliamentary approval and possible amendment, it raises an important question: how much weight should individuals place on the long-term predictability of a jurisdiction’s tax framework when deciding where to live?

For those reviewing their options, Malta offers an established residence-based tax framework and a Mediterranean lifestyle. With changes to Malta’s special tax programmes taking effect on 1 January 2027, the timing of any application also warrants consideration.

Background: Italy’s Appeal to International Wealth

Over the past decade, Italy has established itself as a leading relocation destination for high-net-worth individuals (HNWIs), supported by its special tax regimes. In 2025, it reportedly attracted more than 3,600 millionaires, ranking third globally behind only the United States and the United Arab Emirates.

Italy’s New-Resident Tax Regime (Italy’s Flat Tax Regime)

The most widely publicised regime for high-net-worth individuals moving to Italy remains the Flat Tax Regime for New Italian Residents, introduced in 2016 and effective from 2017.

As initially introduced, the regime allowed eligible individuals becoming Italian tax resident to elect to pay a flat tax of €100,000 per annum on qualifying foreign-source income, including qualifying capital gains realised on foreign investments and other asset disposals. Family members could also be included against an additional tax of €25,000 per annum per family member.

In 2024, the annual flat tax increased to €200,000 for relevant new entrants, while the additional tax for family members remained at €25,000 per annum per family member.

In 2026, Italy updated the regime once again, increasing the annual flat tax to €300,000 for relevant new entrants and the additional tax for family members to €50,000 per annum per family member.

These changes highlight the importance of considering not only the tax treatment available on arrival, but also how a jurisdiction’s approach may evolve over the course of an individual’s residence.

Italy’s Proposed Exit Tax

Italy’s government recently unveiled its plans to introduce an ‘exit tax’ on wealthy Italian residents that leave Italy.

What Is Being Proposed?

The proposed measure would generally impose a 26% tax on certain unrealised gains on financial assets when a qualifying taxpayer ceases to be Italian tax resident. It is proposed to apply where the loss of Italian tax residence takes effect on or after 1 January 2027.

For individuals, the principal conditions include:

• Having been Italian tax resident for at least six of the ten tax years preceding departure.
• Holding relevant financial assets and rights with an aggregate market value of at least €800,000.
• The transfer resulting in Italy losing taxing rights over the relevant income.

Why does it Matter?

An exit tax can materially change the cost of a future relocation, particularly where it creates a liability before assets have been sold and cash has been realised. For internationally mobile families, that makes departure rules an important part of the initial residence decision, not merely an issue to address when leaving.

Malta as an Alternative

A Mediterranean Lifestyle

Situated just off the coast of Italy, Malta offers many of the same Mediterranean qualities: a sunny climate, good food, a rich cultural heritage and a coastal lifestyle. Together with its healthcare facilities, these features make Malta an attractive option for individuals and families seeking a new place to call home.

An Established Remittance-Basis Framework

Malta applies a remittance-basis system of taxation to individuals who are resident but not domiciled in Malta (commonly referred to as ‘non-doms’). These individuals are generally taxed on:

• Malta-source income and capital gains;
• Foreign-source income only to the extent that it is received in Malta.

Foreign-source capital gains are not normally taxable in Malta, even if received in Malta.

Tax Rates

Under the ordinary tax framework, individuals are generally subject to progressive income tax rates of up to 35%. However, Malta also offers a range of special tax programmes for qualifying individuals.

For example, the Global Residence Programme, for eligible third-country nationals, and The Residence Programme, for eligible EU, EEA and Swiss nationals, offer a flat tax rate of 15% on foreign-source income received in Malta, subject to an annual minimum tax of €15,000.

As from 1st January 2027, these programmes will be consolidated under the Individual Tax Programme Rules 2026. The 15% rate will remain, while the annual minimum tax for the corresponding categories will increase to €35,000. A separate category will also be available for qualifying retirees, with a lower annual minimum tax.

Certainty, Stability & Safety

Malta remains a credible option for individuals and families seeking a safe and stable place to live, together with an established tax framework. Its long-standing non-dom regime has retained its core remittance-basis principles, offering continuity for internationally mobile individuals planning their affairs. While special tax programmes and minimum tax requirements have evolved, that underlying framework remains firmly in place.

This track record of continuity strengthens Malta’s appeal for those who value certainty and predictability alongside the financial and lifestyle benefits of relocation.

Why Moving Now Makes Sense

Individuals considering Malta can still apply under the current special tax programmes, including the current minimum annual tax, provided they submit their application by 31st December 2026. Subject to continued compliance with the applicable conditions, this would allow them to benefit under the current framework until 31st December 2031.

Italian residents considering relocation should also assess whether they can cease Italian tax residence before the proposed exit tax takes effect. Those moving later may fall within the scope of the proposed 26% charge.

Get In Touch

At zeta., we help international clients plan and implement their relocation to Malta. Our support covers identifying an appropriate residence and tax route, preparing and submitting applications, and coordinating with third parties, including real estate agents and health insurance brokers.

zeta. is an Authorised Registered Mandatory for the purposes of the Global Residence Programme, The Residence Programme, the Malta Retirement Programme and the United Nations Pensions Programme, as well as a Licensed Agent for the Malta Permanent Residence Programme.

Get in touch today for a free initial consultation.

This article is intended for general information purposes only and does not constitute tax, legal or other professional advice. It provides a high-level summary of the information and reflects our interpretation of the information as at the date of publication.

The application and impact of the information may vary depending on individual circumstances, and the information is subject to change and to interpretation by the relevant authorities. Accordingly, this article should not be relied upon as a substitute for specific professional advice.

Readers are encouraged to seek tailored advice before taking any action based on the information contained herein.