Exit tax for french people leaving france
Executive summary
France’s “exit tax” taxes unrealised capital gains when a long‑term French tax resident moves their fiscal domicile abroad; the rule is aimed at preventing tax exile on latent gains and targets significant shareholdings and certain receivables (article 167 bis) [1]. The regime was relaxed in 2019 (shortening monitoring periods to two or five years) but parliamentary amendments in late 2025 seek to restore the original 15‑year holding period, a politically charged change with limited immediate revenue impact but strong symbolic intent [2] [3] [4].
1. What the exit tax actually taxes and who it hits
Under the statutory framework, the transfer of tax residence outside France can trigger immediate taxation of unrealised capital gains on corporate rights and securities, earn‑out receivables and certain deferred gains — effectively crystallising latent gains as if they had been realised on departure, and applying income tax and social contributions under article 167 bis of the CGI [1] [5]. The rule typically applies to individuals who have been French tax residents for at least six of the last ten years before leaving, and it principally affects entrepreneurs, executives and high‑net‑worth individuals holding significant share participations [5] [6].
2. Deferral, monitoring and filing obligations — the practical mechanics
Taxpayers can in many cases obtain a stay of payment (deferral) rather than immediate cash collection, but that deferral comes with strict reporting: a departure return (form 2074‑ETD) in the year of departure and annual follow‑up declarations (form 2074‑ETS) while the deferral is in force — failure to comply can trigger loss of deferral and immediate payment [5] [7]. Administratively, the deferral framework was narrowed in 2019 and remains conditional on the destination country’s cooperation for certain simplified stays of payment [2].
3. Timeframes, thresholds and the 2019 loosening
Since the 2019 changes, the post‑departure period after which the exit tax can be relieved was shortened to two years for smaller portfolios and five years for larger ones, rather than the 15 years that applied historically; the €2,570,000 breakpoint is one published threshold used to distinguish the two‑year and five‑year bands [2]. These reductions materially eased mobility planning for many entrepreneurs who previously faced a decade‑and‑a‑half monitoring burden [2].
4. The 2025–2026 political reversal: restoring the “long” exit tax
During Finance Bill discussions in late 2025 Parliament adopted an amendment to restore a 15‑year holding period for exemption or reimbursement of deferred exit tax, effectively rolling back the 2019 concessions and raising the spectre of long post‑departure monitoring for business owners who sell after emigrating [3] [8]. The amendment reportedly passed by a 70‑55 vote in the parliamentary debate and was projected to yield a modest €70 million in 2026, signalling that the measure is as much symbolic deterrent as revenue raiser [4].
5. What remains uncertain and why planning matters
The legislative picture is still subject to the usual budget‑bill negotiations and stopgap measures that have characterised recent French fiscal politics, so technical implementation details and final thresholds could shift before final promulgation [9]. Given the legal complexity and tight administrative reporting requirements, departing taxpayers cannot rely on informal understandings: the sources reviewed underscore that the exit tax’s scope, filing obligations and the timing for relief have material consequences for mobility and capital‑structure decisions, and professional advice is commonly recommended [5] [6]. Where reporting or source material is silent on a specific fact, this account does not speculate beyond the cited documents.