Exit tax

Which text applies?

• Art. 167 bis CGI : Taxes, in the year the tax domicile is transferred outside France, unrealised gains on securities and certain receivables, with a deferral of payment and a cancellation of the tax after a holding period.

Who is subject to the exit tax?

The unrealised gain is the difference between the value of the shares on the date of departure and their acquisition price. It is taxed under the rules of article 200 A, in principle at 12.8%, and bears social levies at the rate of 18.6% for a departure occurring since 2025.

• having been tax domiciled in France for at least six of the ten years preceding the transfer of domicile;
• holding interests representing at least 50% of the profits of a company, or whose aggregate value exceeds €800,000 on the date of the transfer;
• the tax base also includes earn-out receivables and, depending on the case, gains previously placed under a tax deferral.

Can payment of the exit tax be deferred?

The deferral is automatic where the taxpayer settles in a Member State of the European Union, or in a State that has concluded with France an administrative assistance agreement and an agreement on assistance in tax collection, provided it is not a non-cooperative State. In other cases, it is granted on request, subject to appointing a tax representative in France and providing guarantees.

The tax is declared in the year of departure, then monitored each year for as long as the deferral runs.

When is the tax cancelled or payable?

The deferred tax is cancelled if the shares are still held two years after departure, a period extended to five years where their aggregate value exceeds €2.57 million on the date of the transfer. A sale, buyback, redemption or cancellation of the shares before that date ends the deferral and makes the tax payable. A return to France before the period expires in principle allows the tax to be cancelled.

The date of departure, assessed against the criteria of French tax residency, and the valuation of the shares on that date drive the whole calculation.

Area of practice

• Tax residence →
• Exit tax →

In which cases does this concept arise?

• Leaving France while keeping a significant shareholding in a company→
• Securing your tax residence when moving abroad→

Which related concepts should you know?

• Tax residence
• Tax treaty
• Tie-breaker rule
• Exit tax relief
• Inbound (impatriate) regime
• Impatriation premium
• Accounts held abroad
• Penalty for an undeclared account