Introduction
You've decided to leave France. Maybe for Dubai, Switzerland, Portugal, or Singapore. You've heard about the exit tax and you're wondering: will the French state take a chunk of my wealth on the way out?
The short answer: probably not immediately, but you need to understand the mechanism to avoid costly mistakes.
The French exit tax (formally impôt sur les plus-values latentes) is one of the most misunderstood taxes in European wealth planning. It doesn't actually force you to pay at departure in most cases — but it creates a deferred liability that can follow you for years.
This guide explains exactly how it works in 2026, who it applies to, and how to plan your departure properly.
What Is the Exit Tax?
The exit tax is a tax on unrealized capital gains that applies when a French tax resident transfers their fiscal domicile outside of France.
Key distinction: You don't sell your assets. You just move. France says: "We're calculating the gain now, and you may owe us later."
| Element | Detail |
|---|---|
| Legal basis | Article 167 bis du Code Général des Impôts (CGI) |
| Created | 2011 (Sarkozy era), modified 2013 (Hollande), current form since 2019 |
| Tax type | Tax on unrealized (latent) capital gains |
| Trigger | Transfer of fiscal domicile outside France |
| Payment | Deferred (automatic sursis) for EU/EEA + treaty countries |
Who Is Subject to the Exit Tax?
You are subject to the exit tax if you meet both conditions:
Condition 1: Residence Duration
You have been a French tax resident for at least 6 of the last 10 years before departure.
| Years of French residence | Subject to exit tax? |
|---|---|
| 4 out of last 10 | ❌ No |
| 6 out of last 10 | ✅ Yes |
| 10 out of last 10 | ✅ Yes |
| Arrived 5 years ago | ❌ No (5 < 6) |
Condition 2: Holdings Threshold
You hold, directly or indirectly, at least one of the following at the date of departure:
| Threshold | Scope |
|---|---|
| Securities worth ≥ €800,000 | Total value of your investment portfolio (listed shares, bonds, fund units, etc.) |
| ≥ 50% of a company's shares | Social rights in any single company |
Both conditions must be met. If you've been resident only 5 years, you're exempt regardless of your portfolio size.
What Gets Taxed?
Assets In Scope
| Asset type | In scope? | Notes |
|---|---|---|
| Listed shares | ✅ Yes | French and foreign |
| Unlisted shares (SAS, SARL, etc.) | ✅ Yes | Including your own company |
| OPCVM / fund units | ✅ Yes | SICAV, FCP, etc. |
| Crypto-assets | ✅ Yes | Since 2019 |
| PEA (Plan d'Épargne en Actions) | ❌ No | Specific exemption |
| Assurance-vie | ⚠️ Partial | Only the unit-linked portion (unités de compte) |
| Real estate | ❌ No | Different regime (plus-values immobilières) |
| Art, collectibles | ❌ No | Not covered |
How the Gain Is Calculated
The latent gain is calculated as:
Latent gain = Market value at departure date − Acquisition cost
| Element | How it's determined |
|---|---|
| Market value | Closing price on departure date (listed); fair market value (unlisted) |
| Acquisition cost | Purchase price + acquisition costs (frais d'acquisition) |
| Departure date | Day you transfer fiscal domicile (déclaration filed) |
Tax Rates (2026)
| Component | Rate |
|---|---|
| Flat tax (PFU) | 12.8% (income tax portion) |
| Social charges | 17.2% (CSG/CRDS) |
| Total flat tax | 30% |
| Alternative: progressive scale | Barème progressif (up to 45%) + 17.2% social charges — can be elected if more favorable |
Important: The CEHR (Contribution Exceptionnelle sur les Hauts Revenus) of 3-4% may also apply on very large gains, pushing the effective rate above 30%.
Payment: Sursis vs. Immediate
This is where most people get confused. In the vast majority of cases, you do not pay at departure.
Automatic Deferral (Sursis Automatique)
If you move to an EU/EEA country or a country with a qualifying tax treaty (which includes UAE, Switzerland, Singapore, UK, etc.), payment is automatically deferred.
| Destination | Deferral? | Condition |
|---|---|---|
| 🇪🇺 EU country | ✅ Automatic sursis | None |
| 🇨🇭 Switzerland | ✅ Automatic sursis | Tax treaty with assistance clause |
| 🇦🇪 UAE | ✅ Automatic sursis | Tax treaty with France |
| 🇸🇬 Singapore | ✅ Automatic sursis | Tax treaty with France |
| 🇬🇧 UK | ✅ Automatic sursis | Tax treaty |
| 🇲🇺 Mauritius | ✅ Automatic sursis | Tax treaty with France |
| 🇧🇷 Non-treaty country | ❌ Immediate payment or guarantee | Must provide guarantee (caution) |
What Triggers Actual Payment?
You actually pay the exit tax only if you sell the assets while the sursis is active:
| Event | Consequence |
|---|---|
| You sell the assets | Tax becomes due (on the lesser of: latent gain at departure OR actual gain at sale) |
| You gift the assets | Tax becomes due |
| You move to a non-treaty country | May lose sursis — complex rules |
| You die | Exit tax is cancelled (not transmitted to heirs) |
When Does the Exit Tax Expire?
This is the critical planning point. The exit tax has a statute of limitations:
| Situation | Expiry |
|---|---|
| Departure before 2014 | 8 years (old regime — expired) |
| Departure after 2014, holding < 50% | 2 years after departure |
| Departure after 2014, holding ≥ 50% | 5 years after departure |
| Unrealized gains > €2.57M at departure | 5 years after departure |
The Key Rule
If you hold your assets (don't sell) for 2 or 5 years after leaving France, the exit tax is completely cancelled.
This is the most important fact in this entire article.
| Your situation | Hold period needed | Strategy |
|---|---|---|
| Portfolio < €2.57M gain, < 50% holdings | 2 years | Don't sell for 2 years after departure |
| Portfolio ≥ €2.57M gain OR ≥ 50% holdings | 5 years | Don't sell for 5 years after departure |
Filing Requirements
Even with automatic sursis, you must file specific declarations:
At Departure
| Form | Purpose | When |
|---|---|---|
| Déclaration 2074-ETD | Detail of all assets subject to exit tax | With your departure year tax return |
| Déclaration 2042-C | Report of latent gains | Same |
Annual (During Sursis Period)
| Obligation | Detail |
|---|---|
| Annual declaration | Confirm you still hold the assets |
| Report any disposals | If you sell, declare the gain |
At Expiry
| Event | Action needed |
|---|---|
| 2 or 5 year expiry reached | File final declaration requesting dégrèvement (cancellation) |
| Sale during sursis period | File declaration + pay tax within 30 days |
Practical Planning: How to Leave France Tax-Efficiently
Step 1: Audit Your Portfolio (12 months before)
| Action | Purpose |
|---|---|
| List all securities holdings | Identify what's in scope |
| Calculate unrealized gains per asset | Know your exposure |
| Identify any losses | Losses can offset gains |
| Check PEA and assurance-vie allocation | These may be exempt |
| Valuation of unlisted shares | Get a professional valuation if you hold private companies |
Step 2: Optimize Before Departure (6-12 months)
| Strategy | How it works | Risk level |
|---|---|---|
| Realize losses | Sell losing positions to reduce net latent gain | Low |
| Shift to PEA | Transfers to PEA are exempt from exit tax | Low (within PEA limits) |
| Gift with usufruit | Donate bare ownership, retain usufruit — reduces taxable base | Medium (gift tax applies) |
| Corporate restructuring | Apport-cession with reinvestment commitment | High (requires 60% reinvestment within 2 years) |
Step 3: Choose Your Destination
| Destination | Treaty? | Capital gains tax there? | Strategy |
|---|---|---|---|
| 🇦🇪 UAE | ✅ Yes | 0% | Hold 2/5 years → exit tax cancelled → sell tax-free |
| 🇨🇭 Switzerland | ✅ Yes | 0% (most cantons for movable assets) | Same strategy, CHF diversification |
| 🇵🇹 Portugal | ✅ Yes (EU) | NHR expired 2024, now 20% flat | Less attractive since NHR end |
| 🇲🇺 Mauritius | ✅ Yes | 0% capital gains | Excellent for Africa-linked wealth |
| 🇸🇬 Singapore | ✅ Yes | 0% capital gains | Premium option, high cost of living |
| 🇬🇧 UK | ✅ Yes | Up to 24% | Remittance basis possible for non-doms (being phased out) |
Step 4: Execute Properly
| Timeline | Action |
|---|---|
| D-12 months | Portfolio audit + optimization begins |
| D-6 months | Destination setup (company, visa, banking) |
| D-3 months | Prepare 2074-ETD declaration |
| D-Day | Transfer fiscal domicile |
| D+30 days | Establish tax residency in new country |
| D+1 year | File annual exit tax attestation |
| D+2 or D+5 years | File for dégrèvement (cancellation) → EXIT TAX = €0 |
Common Mistakes
| Mistake | Consequence |
|---|---|
| Selling assets in the first 2 years | Exit tax becomes immediately due |
| Forgetting annual declarations | Risk of losing sursis → immediate taxation |
| Not establishing genuine residency abroad | France can challenge your departure and maintain fiscal residence |
| Apport-cession without proper reinvestment | Full tax + penalties |
| Ignoring crypto holdings | Crypto is in scope since 2019 — omission = fraud |
| Moving back to France within 2 years | Complex rules — may reset the clock |
Real Numbers Example
Scenario: Jean-Marc, French tax resident for 15 years, leaves for Dubai.
| Asset | Acquisition | Value at departure | Latent gain |
|---|---|---|---|
| Startup shares (SAS) — 80% holding | €10K | €2,000,000 | €1,990,000 |
| Listed portfolio (CTO) | €200K | €450,000 | €250,000 |
| Crypto (BTC/ETH) | €50K | €180,000 | €130,000 |
| Assurance-vie (UC portion) | €100K | €160,000 | €60,000 |
| Total latent gain | €2,430,000 |
Exit tax calculation (PFU 30%): €2,430,000 × 30% = €729,000
Jean-Marc's strategy:
- Moves to Dubai (France-UAE treaty → automatic sursis)
- Does NOT sell anything for 5 years (gain > €2.57M threshold? No, but ≥ 50% holding → 5-year rule)
- Files annual declarations
- After 5 years: requests dégrèvement
- Exit tax paid: €0
- Sells startup shares in year 6 in Dubai: capital gains tax: 0%
Total tax saved: €729,000
How Private Office Helps
We work with French expatriates at every stage of the departure process.
| Service | What's included | Jurisdiction |
|---|---|---|
| Pre-departure audit | Portfolio analysis, exit tax simulation, optimization strategy | France |
| Destination setup | Company formation + visa + banking | 🇦🇪 UAE / 🇨🇭 Switzerland / 🇲🇺 Mauritius |
| Plan B Fiscal UAE | Full relocation package including freezone, visa, banking | 🇦🇪 UAE from €15,000 |
| Ongoing compliance | Annual exit tax declarations, liaison with French tax authorities | All |
What we DON'T do:
- We don't provide legal or tax advice (we work with licensed advisors in each jurisdiction)
- We don't help with aggressive tax schemes — only compliant, defensible structures
Ready to Plan Your Departure?
Book a free consultation to assess your exit tax exposure and plan your optimal timeline.