In short
- Moving a business's tax residence abroad brings unrealised gains to the surface, taxed at market value: this is the exit tax under art. 166 TUIR.
- It applies to companies but also to sole traders and partnerships; not to individuals who do not carry on a business.
- For moves to EU or EEA countries with recovery assistance, the tax can be paid in five annual instalments.
- Since 2024 a company is resident in Italy if it has its registered office, its place of effective management or its day-to-day management mainly there (art. 73 TUIR).
Exit tax: what art. 166 TUIR provides
When a person carrying on a business moves their tax residence abroad, the unrealised gains on assets and goodwill crystallise and are taxed as if the assets had been sold at market value (art. 166 TUIR). Exit tax is not triggered on assets that remain functionally connected to a permanent establishment in Italy.
It applies to corporations, partnerships and sole traders. For individuals who do not carry on a business, current legislation provides for no exit tax: unrealised gains, for example on shareholdings, are not taxed on the move.
Paying exit tax in instalments, and the alternatives
- For moves to EU or EEA states on the white list with which Italy has a mutual recovery assistance agreement equivalent to Directive 2010/24/EU, the tax can be paid in five annual instalments (art. 166, para. 9, TUIR).
- The move can also be carried out through a cross-border conversion, merger or division (Legislative Decree 19/2023, implementing Directive (EU) 2019/2121).
- Under company law, moving the registered office abroad gives shareholders who did not take part in the decision the right to withdraw (arts 2437 and 2473 of the Civil Code).
Where a company is tax resident from 2024
Since 2024 a company is resident in Italy if, for the greater part of the tax year, it has its registered office, its place of effective management (where strategic decisions are taken) or its day-to-day management mainly in Italy (art. 73 TUIR, as amended by Legislative Decree 209/2023). For foreign holding companies that control Italian companies, the residence presumption in art. 73, para. 5-bis, TUIR still applies.
Exit tax: worked example
An Italian SRL (limited liability company) moves its seat to Ireland. It owns a property carried in the balance sheet at €200,000 and worth €500,000, plus unrecorded goodwill estimated at €300,000.
- Unrealised gain: €300,000 on the property plus €300,000 of goodwill, i.e. €600,000.
- IRES (corporate income tax) at 24%: €144,000.
- With instalments: five annual instalments of about €28,800, plus interest.
If the property remains part of a permanent establishment in Italy, no gain arises on that asset.
Want to know how this applies to your case?
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Risks of moving a company abroad: sham relocation
- Sham foreign residence (esterovestizione): moving the seat on paper while continuing to run the company from Italy; the company remains resident in Italy, with tax, penalties and interest.
- Undervaluing goodwill and assets: exit tax is calculated at market value.
- Overlooking the effects on shareholders and in the destination country.
How we handle your company's move abroad
- We estimate the exit tax and assess the alternatives, such as keeping a permanent establishment in Italy.
- We organise governance and management consistently with the new residence.
- We coordinate shareholders, the destination country and the treaties.
Frequently asked questions
Does Italian exit tax apply to individuals?
The exit tax under art. 166 TUIR applies to those carrying on a business: companies, but also sole traders and partnerships. Current legislation does not provide for it for individuals who do not carry on a business. Later disposals of shareholdings in Italian companies may remain taxable in Italy, unless a treaty provides otherwise (art. 23, para. 1, letter f, TUIR).
Can Italian exit tax be paid in instalments?
Yes, in five annual instalments for moves to EU or EEA states on the white list that have a recovery assistance agreement with Italy.
Is moving the registered office enough?
No: what also counts is where the company is actually managed, i.e. where decisions are taken and day-to-day management is carried out.
Do I pay exit tax if I keep a base in Italy?
Not on assets that remain connected to a permanent establishment in Italy: no gain arises on those.
How much does a consultation with Andrea Matera cost?
An online consultation costs €150 + VAT for 30 minutes, €300 + VAT for 60 minutes and €450 + VAT with a written summary and action plan. It takes place by video call, in Italian or English, wherever you are.
Related guides
- Partita IVA and moving abroad: close it or keep it?
- Leaving Italy: how to really stop being tax resident
- Inheritance and gifts between Italy and other countries
Learn more: Advice for companies
General information, current as of 22 October 2026: it is not a substitute for advice on your own case.
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