In summary…
A business owner who leaves France with securities worth at least €800,000, or at least 50% of a company's profits, is taxed on their unrealized capital gains on the date of departure: 31.4% in 2026. This tax is automatically deferred to the European Union and countries with which France has mutual assistance agreements, and upon request and with guarantees elsewhere. It is cancelled after two years, or five years for securities exceeding €2.57 million, provided the securities have not been sold.
1. Who is affected
L'’exit tax of article 167 bis of the CGI (fiche impots.gouv.fr) applies to taxpayers who transfer their tax residence outside of France after having been domiciled there for at least six of the ten previous years, when the securities held by their tax household meet one of these two conditions:
- a stake of at least 50% in the profits of a company, directly or indirectly;
- a total value of securities of at least €800,000 on the date of departure.
Departure is deemed to take place on the day before you cease to be taxable in France on your worldwide income.
2. What is taxed
- Unrealised capital gains on your shares: the difference between their value on the day of departure and their acquisition cost.
- Earn-out receivables arising from an earlier sale.
- Capital gains under tax deferral, in particular those from a contribution of shares to a holding company (Article 150-0 B ter). Contributing shares before leaving therefore does not take the gain outside the scope of exit tax.
Shares held in a PEA or PEA-PME are excluded from the tax base. Assurance-vie contracts are not shares covered by the scheme: they follow their own rules.
3. The rate in 2026
For a departure in 2026: 12.8% income tax and 18.6% social charges, i.e. 31.4%. Opting for the progressive income tax scale remains possible. Gains deferred under a contribution-and-sale arrangement are taxed at the rate of the year of the contribution.
4. Deferral of payment: automatic or on request
Automatic if you move to a European Union country, or to a State bound to France by an administrative assistance agreement and a tax recovery assistance agreement, and not listed as non-cooperative. The tax authorities' list contains around seventy States, including the United States, the United Kingdom, Norway, Monaco, Japan, Australia, Morocco and Mauritius.
On request for other destinations, including Switzerland, the United Arab Emirates and Singapore: form 2074-ETD must be filed no later than 90 days before departure, with a tax representative appointed in France and guarantees provided.
5. When the tax is cancelled
- After two years if you still hold the shares, five years where their total value exceeded €2.57m on departure. This relief covers both income tax and social charges, and applies only to unrealised gains.
- If you return to France while still holding the shares.
- On death.
- On a gift of the shares: automatically if you live in a State eligible for automatic deferral; elsewhere, provided you show that the main purpose of the gift is not to avoid tax.
6. When the tax becomes payable
A sale, buy-back, redemption or cancellation of the shares ends the deferral for the portion concerned. If the sale price is below the value used on departure, the tax is reduced accordingly; tax paid in your country of residence on that sale is credited against the French tax. Failing to file the annual follow-up return also makes the tax payable, after a formal notice left unanswered for thirty days.
7. The returns to file
| Form | When |
|---|---|
| 2074-ETD | With the income tax return for the year following departure; no later than 90 days before departure for deferral on request. |
| 2074-ETSL or 2074-ETS3 | Every year if you have earn-out receivables or deferred gains; otherwise, in the year following an event (sale, relief). |
8. What the 2027 draft Finance Bill provides
Article 5 of the bill, presented on 1 October 2026, targets gains deferred under a contribution-and-sale arrangement: a gift or a death would end the deferral instead of cancelling it, for transfers made on or after 1 October 2026. The text has not been passed and may be amended.
9. Worked example
Situation. A business owner directly holds 100% of their company, valued at €3m, with an acquisition cost of €100,000. They move to Portugal in 2026.
Issue. The unrealised gain of €2.9m is taxed on departure: €910,600 at 31.4%.
Strategy. As Portugal is in the European Union, payment is deferred without guarantees. As the shares exceed €2.57m, the relief period is five years.
Result. If they keep the shares until 2031, the €910,600 is cancelled. If they sell in 2028, it becomes payable; Portuguese tax paid on the sale is then credited against the French tax, up to the amount of that tax.
Sell before or after departure?
The French rule depends on the timing of the sale, the value of the securities, and the percentage held. The table provides the rule, not advice: each line is interpreted before the tax laws of the host country.
| Situation | Taxation in France | Source |
|---|---|---|
| Sale before departure, you are a resident | Flat tax rate of 31.4% (12.8% income tax and 18.6% social security contributions), or progressive tax scale by overall option | impots.gouv.fr, capital gains on securities |
| Sale after departure: you held 25 or fewer % shares of the company over the last 5 years, with shares worth less than €800,000. | In principle, there is no tax in France on capital gains. | BOI-RPPM-PVBMI-10-30-20 (art. 244 bis C) |
| Post-departure sale of securities worth at least €800,000 or 50% of profits | Exit tax: deferral possible, tax relief after 2 or 5 years, but a sale before this period ends the deferral. | impots.gouv.fr, exit tax |
| Sale after departure, you held more than 25 % shares in a company subject to corporate tax whose registered office is in France | Withdrawal of 12.8 %, subject to the agreement | BOI-RPPM-PVBMI-10-30-20 (art. 244 bis B) |
| Post-departure sale from a non-cooperative state or territory | 75 %, regardless of the percentage held | BOI-RPPM-PVBMI-10-30-20 |
The threshold of 25 % is understood to be strictly greater than 25 %, according to the BOFiP.
One case (fictitious profile). A single entrepreneur owns 15 shares in a company with an unrealized capital gain of €300,000. His shares are worth €450,000, below the €800,000 threshold. If sold before leaving France: €300,000 × 31.4 shares = €94,200 (€38,400 in tax and €55,800 in social security contributions). If sold after leaving France, without exit tax and without exceeding the 25 share threshold: in principle, €0 in France, with the tax of the host country to be added. This case illustrates a rule; it does not say that a sale after leaving France is preferable.
Sources: impots.gouv.fr, exit tax ; BOFiP, BOI-RPPM-PVBMI-10-30-20, Capital gains on securities held by non-residents.
Frequently asked questions
Does returning to France cancel the exit tax?
Yes, if you still hold the shares: you are put back in the position you would have been in had you not left.
Can I move to Switzerland without providing guarantees?
No. Switzerland is not bound to France by a tax recovery assistance agreement: deferral must be requested 90 days before departure, with guarantees and a tax representative.
Does contributing shares to a holding company before leaving avoid exit tax?
No. The deferred gain is included in the exit tax base, and it does not qualify for relief after two or five years.
Is it better to sell your shares before or after departure?
The rules are not the same: see the table "Sell before or after departure?" above. The result depends on the stake held, the value of the securities, and the tax rates of the host country.
Planning a move abroad while holding company shares? Book an appointment — we set the timing and the destination before you leave. See also contribution-and-sale and moving abroad.
