TL;DR
The deferral of payment of the exit tax (taxation of unrealized capital gains at the time of departure from France) is the key mechanism to avoid paying the tax immediately upon departure.
The deferral of payment of exit tax allows for the postponement of the actual payment of the tax calculated on the date of the transfer of residence. The deferral is automatic for a transfer to a Member State of the European Union or to a State or territory linked to France by an administrative assistance agreement and a tax collection assistance agreement, and not classified as non-cooperative (Article 167 bis IV of the French General Tax Code).
It is granted on an optional basis and subject to the provision of guarantees for other destinations. The tax is cancelled if you still hold the securities after 2 years, or 5 years if their total value exceeded €2.57 million, as well as in the event of a return to France. It becomes payable in the event of the sale of the securities or failure to file a declaration. If you only hold unrealized capital gains, the 2074-ETS3 monitoring declaration is filed only the year following an event (sale, gift, cancellation); it is annual if there are deferred capital gains or receivables for additional payments.
Automatic deferment vs. optional deferment
This is where wealth management strategy comes into play. The General Tax Code (article 167 bis) distinguishes between two regimes depending on your destination.
| Item | Automatic deferral | Deferred payment by option |
| Destinations concerned | EU and States bound by agreements on administrative assistance and recovery | Other countries (e.g., Switzerland, United Arab Emirates, Singapore) |
| Request | None, automatic | Express request 90 days before departure, with a tax representative |
| Guarantees | None | Bank guarantee or pledge of securities |
| Follow-up statement | 2074-ETS3 the year of an event; each year in the event of deferred capital gains or additional payments | 2074-ETS3 the year of an event; each year in the event of deferred capital gains or additional payments |
1. Automatic payment deferral (European Union and States bound by convention)
If you are leaving for a Member State of the European Union, or for a State or territory linked to France by an administrative assistance agreement and an assistance agreement for debt recovery, and are not classified as non-cooperative, the stay of execution is by right.
- Advantage : No guarantee required, no setup costs.
- Top destinations: Portugal, Spain, Italy, Luxembourg, but also the United Kingdom, the United States, Norway, Monaco, Japan, Morocco or Mauritius (2025 list from the administration).
2. Optional payment deferral (Rest of the world)
If you are travelling to a country not on this list (Switzerland, United Arab Emirates, Singapore, etc.), the deferment is no longer a right, but a option to be expressly requested. Above all, it is conditioned by the establishment of guarantees with the tax authorities and the appointment of a tax representative in France. The application must be submitted with form 2074-ETD no later than 90 days before departure. The guarantees cover the tax: 12.8% of the capital gains at the time of departure, then an additional payment upon receipt of the tax assessment notice to also cover social security contributions.
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Cases of expiry of the payment deferral
- Sale or repurchase of securities for which the deferral has been granted: taxation becomes immediately due on the latent capital gain corresponding to the securities sold.
- Gift of securities: the tax is cancelled if you reside in a State of automatic deferment; elsewhere it becomes payable, unless you demonstrate that the gift does not have a primarily tax-related purpose.
- Returning to France as a tax residence: the tax is cancelled for the securities that you still hold on the date of return (article 167 bis of the CGI).
- Failure to file follow-up declarations: the deferred tax becomes payable if the situation is not rectified within thirty days of a formal notice.
- Death of the expatriate taxpayer: the deferred capital gain is cleared and is not owed by the heirs.
What guarantees should be required for an optional deferment?
The guarantees accepted by the administration are a bank guarantee from a first-tier institution, the pledging of the securities that triggered the exit tax, the pledging of other securities, or a mortgage on French real estate.
The guarantees cover the entire tax. Initially, they cover 12.8% of the capital gains; an additional amount is added within one month of the tax assessment notice to reach the total amount of the’exit tax Theoretically, for an expatriation to the United Arab Emirates generating a theoretical exit tax of €1.5 million, the required bank guarantee amounts to €1.5 million. A bank guarantee has an annual cost set by the bank; we calculate this before departure.
The hidden cost of guarantees: the trap of countries without automatic deferment
This is the point that many advisors fail to mention. To obtain a payment deferral towards Dubai or the Switzerland, You must provide a guarantee: a bank guarantee, a pledge of securities or a mortgage on real estate in France.
- The cost of the bank guarantee: A bank guarantee has an annual cost set by the bank; we calculate it before departure.
That's why, at Balmont Conseil, We systematically incorporate this "carrying cost" into our comparative models. Sometimes, a destination with slightly higher local taxes but located within the EU proves more profitable than a distant tax haven because of these financial costs.
The opinion of Alexis Sagnier, CGP Balmont
Automatic deferral of payment is a major tax argument for relocating within Europe. A transfer to Portugal, Italy or Spain requires no guarantee and involves no recurring cost.
A transfer to Dubai or Singapore, on the other hand, requires bank guarantees, which represent a carrying cost that must be calculated before departure. This factor should be included in the comparative modeling of destinations, never in the decision based solely on the nominal exchange rate of the host country.
The tax base and reinvestment: remain vigilant
To avoid duplication with our complete guide on the calculation of the Exit Tax, Let us simply recall that the exit tax applies after at least 6 years of residence in France over the last 10 years, when the household holds at least 50 % of profits from a company or securities with a total value exceeding €800,000.
Regarding reinvestment, particularly via article 150-0 B ter (contribution-transfer), Leaving France terminates the deferral of taxation: the deferred capital gain is taxed under the exit tax regime, at the rate applicable in the year of the contribution, and may be subject to a stay of execution. It is not eliminated after 2 or 5 years. After leaving France, a contribution of securities to a holding company under the conditions of Article 150-0 B ter does not terminate the stay of execution.
The 2074-ETS3 and 2074-ETSL follow-up declarations
If there is one point on which we are inflexible with our clients, it is the declarative formalism. To maintain the deferral, you must file a follow-up declaration: each year if you have deferred capital gains or claims for additional payments ( form 2074-ETSL (For years without an event, use form 2074-ETS3 otherwise); only the year following an event (sale, gift, cancellation) if you only have unrealized capital gains. This is accompanied by forms 2042 and 2042 C.
Failure to submit this declaration will result, after a formal notice has remained unheeded for thirty days:
- The immediate enforceability of the deferred tax.
It's the "silly" mistake that ruins years of optimization. We ensure rigorous monitoring of these deadlines for our clients.
Conclusion: plan ahead
The deferral of Exit Tax payment is a fantastic tool for mobility, but it's also a legal and financial burden. Between the guarantee costs for exotic destinations and the ironclad discipline required for follow-up declarations, one doesn't simply move abroad "blindly" when one possesses significant assets.
At Balmont Conseil, My role is to bring you this clarity. Thanks to the’wealth engineering and by pricing each scenario, we secure every step of your residence transfer.
Don't let a form error or a miscalculated security deposit cost hinder your international ambitions.
FAQ: Everything you need to know about the Exit Tax deferral
Is the tax cancelled if I keep my securities?
Yes. For departures since 2019, if you retain your shares during 2 years (5 years if your shares were initially worth more than 2.57 million euros) After your departure, the tax on unrealized capital gains is waived (cancelled). The waiver applies to both income tax and social security contributions.
What happens if I sell my securities before the tax is cancelled?
The deferral ends for the securities sold: you pay the Exit Tax calculated initially, reduced if the sale price is lower than the initial valuation. After 2 years, or 5 years for securities exceeding €2.57 million, the tax is already eliminated. However, if the tax paid in your new country of residence is less than the French Exit Tax, you can often claim the foreign tax as a tax credit (depending on the bilateral tax treaty).
What guarantees are accepted by the tax authorities for a business setup in Dubai or Switzerland?
No guarantees are required for the United States: the deferment is automatic. For Dubai or Switzerland, the tax authorities prefer bank guarantees from top-tier institutions. pledging your securities account or a French assurance-vie policy is also possible. Less frequently, a mortgage on real estate located in France may be accepted, but the formalities are cumbersome.
Does the Exit Tax apply to my main residence?
No. The Exit Tax only applies to equity interests, securities, shares, and bonds. Real estate held directly (your primary residence or rental investments) is not included. However, be aware of the implications for shares in SCI, which may be affected in certain specific cases.
Does returning to France cancel the Exit Tax?
Absolutely. If you return to be a tax resident in France, the deferral is cancelled and the tax is reduced on all the securities you still hold. This is the tax "right of remorse".
💡 Also read to secure your assets:
Sources & References:
- Article 167 bis of the General Tax Code (CGI)
- Official Bulletin of Public Finances (BOI-RPPM-PVBMI-50)
- Declaration 2074-ETD and its official instructions (DGFiP), 2025 transfers
To learn more: Tax retroactivity: why a law passed in July can tax your January income.
Alexis Sagnier
Founder of Balmont Conseil in 2013, he calculates the cost of each recommendation in euros (tax, fees, transfer) before any decision is made.
