Leaving France: exit tax, tax residence and departure procedures

Changing your address abroad is not enough to cease being a French tax resident: three criteria are examined, and only one is required to maintain your status. The exit tax can tax your unrealized capital gains when you transfer your tax residence. It applies to taxpayers domiciled in France for at least six of the ten years preceding the transfer, who hold at least 50% of the profits of a company or securities worth €800,000 (exact threshold below). Deferrals and tax relief are available, subject to certain conditions.

Tax residence: only one criterion is needed

Article 4 B of the French General Tax Code (CGI), as explained by the French Tax Administration's Official Bulletin (BOFiP) (BOI-IR-CHAMP-10), establishes three criteria: your home or principal residence is in France, you carry out a professional activity there, whether salaried or not, unless it is secondary, or you have the center of your economic interests there. "It is sufficient for one of the criteria to be met," states the BOFiP.

Generally, more than six months of residence in France constitutes a principal residence, although this is not an absolute criterion: the BOFiP (French Official Tax Bulletin) does not specify a number of days that alone determines the matter. If another country also considers you a resident, the tax treaty will determine the distinction on a country-by-country basis. See French tax residence: the three criteria of Article 4 B.

Exit tax: are you affected?

The exit tax taxes the unrealized capital gains on your securities at the date of the transfer of your tax residence. Two conditions must be met.

A period of residence. You have been tax resident in France for at least six of the ten years preceding the transfer.

A threshold. Either you and the members of your tax household hold at least 50% of the profits of a company, or the total value of your shares exceeds or reaches €800,000 at the time of transfer. These two tests are alternative. The instructions for form 2074-ETD state "greater than €800,000," while the public information sheet states "at least €800,000": the exact threshold is not clearly defined here.

What are the gains? The guide distinguishes between unrealized capital gains, capital gains subject to deferred taxation, and receivables for additional payments. Unrealized capital gains are the value of the securities at the time of transfer minus their acquisition price. Securities held in a PEA (equity savings plan) or a PEA-PME (equity savings plan for SMEs) are specifically excluded.

Capital losses. An unrealized capital loss cannot be offset against unrealized capital gains on other investments, nor against other actual capital gains, and cannot be carried forward.

The rates. According to the 2025 transfer guidelines, income tax is 12.8% at the flat rate, with an option for the progressive tax scale (box 2OP). It indicates social security contributions of 17.2% for a 2025 transfer and 18.6% for a 2026 departure. For a 2026 departure, please refer to the guidelines for the year of departure.

Payment deferral: automatic or upon request

The deferral is "either automatic or granted upon request," the information sheet states. According to the notice, which describes several scenarios, "The automatic deferral of payment applies as soon as" certain conditions are met. The first scenario includes the following: "this state or territory is not non-cooperative within the meaning of Article 238-0 A." We do not specify whether your destination falls under this category: check the information sheet for your year of departure.

Apart from automatic deferral, you must expressly request it: declare the amounts on form 2074-ETD, appoint a tax representative established in France, and offer security for income tax (12.8% of the total amount of capital gains and receivables). Since November 22, 2019, the information sheet states "no later than 90 days before this transfer." The instructions also state "within ninety days preceding the transfer": have the deadline confirmed.

Tax relief: 2 years or 5 years

If you still hold your securities after the deadline, the tax is reduced, or refunded if it has already been paid. Since 2019, according to the information sheet, this deadline has been reduced from 15 years to 5 or 2 years.

Statements, follow-up, and a fresh start

• Automatic stay of execution, or no request for stay. Form 2074-ETD is filed the year following the transfer, with the tax office that was responsible for your residence in France, along with Form 2042 and Form 2042 C, within the same time limits.
• Deferral granted upon request. Two filings: the first no later than 90 days before the transfer, to the non-resident tax office, without form 2042; the second the following year, with form 2042 and form 2042 C. Form 2074-ETD "only exists in "paper" format": keep a copy.
• Follow up. With a deferral, form 2074-ETS3 is also required (information sheet: transfers from January 1, 2014; revised form: "between 1/1/2014 and 12/31/2025"). The simplified 2074-ETSL form is valid if the deferral is total and no events occurred during the year, except for a transfer after January 1, 2019, declaring only unrealized capital gains subject to deferral. For 2026, review the form for that year. After an event resulting in a tax reduction or refund, failure to file may make the tax due if the situation is not rectified within thirty days of a formal notice.
• New transfer. Inform the administration in writing within two months.

If you have made a contribution-sale

Transferring tax residence outside of France terminates the deferral of taxation under Article 150-0 B ter of the French General Tax Code (CGI): the capital gain is taxed at the rate that would have applied in the year of the contribution. The deferral mentioned in the notice covers "capital gains that have been deferred but become taxable as a result of this transfer." See also Contribution-sale: what changes since February 21, 2026.

The year of departure and the procedures

Form 2042 covers your income from January 1st to your departure date. Form 2042-NR covers French-source income after departure, for those who have taxable income in France both before and after their departure.

Before leaving: notify your last public finance center of your new address, contact your bank (they will tell you if you need to close any accounts or products), check with the tax authorities of your country of residence and find out about your health insurance.

What France continues to impose

A non-resident is taxable in France only on their French-source income, subject to tax treaties. For example:

• Dividends from French sources. Withholding tax of 12.80 % (as of 1 January 2026), subject to agreements; 75 % in a non-cooperative State or territory; no social security contributions for a non-resident for tax purposes.
• Capital gains on securities. In principle, these transfers are not taxed, unless you have held, directly or indirectly with your family group, more than 25% of the rights to profits of a company subject to corporation tax and having its registered office in France, at any time during the five years preceding the transfer: a levy of 12.8% applies. This is increased to 75% if the beneficiary is domiciled in a non-cooperative State or territory, regardless of the percentage of rights held.
• Real estate. A levy of 19 % is applied to the capital gain, plus social security contributions depending on your situation.

See Capital gains on securities held by non-residents and Wealth tax for non-residents.

Numerical example (fictitious profile)

Situation. A Lyon-based business owner, who has been living in France for over ten years, holds 60 shares of his company: shares worth €1,800,000, acquired for €600,000. His portfolio of listed securities is worth €300,000, acquired for €400,000. He is planning to leave in 2026.

Issue. He meets the requirements: more than six years of residency out of ten, 60% of profits, and securities worth €1,800,000 above €800,000 regardless of the threshold. He plans to offset the portfolio loss with the gain from his company.

Strategy. He calculates the tax on each shareholding and sets his tax return schedule.

Result. The unrealized capital gain is €1,200,000; the capital loss of €100,000 is not offset against it. The calculation applies the 2025 transfer rates from the guidelines to 2026. The tax amounts to €376,800: €153,600 in income tax (12.8 times the % tax rate) and €223,200 in social security contributions (18.6 times the % tax rate), representing 31.4 times the unrealized capital gain. An offset, which the guidelines do not allow, would have resulted in a tax liability of €345,400 (€31,400 less). His shares are worth €2,100,000, below €2.57 million: tax relief after 2 years if he holds them (5 years with €2,900,000). Without a deferral upon request, the 2074-ETD form is due to be filed in 2027.

What changes depending on your situation

• The value and acquisition price of your securities determine the unrealized capital gain and the tax relief period.
• Your destination determines whether the stay of execution is automatic or must be requested.
• A previous contribution-sale alters the analysis.
• Your home, your business, and your economic interests determine whether France remains your home.

These points are examined on a case-by-case basis.

Your destination

Our country-specific pages: Leaving France for the United Arab Emirates, Leaving France for Luxembourg, Leaving France for Singapore and Leaving France for Monaco. For Monaco, form 2074-ETD states that, if you are a French citizen, transferring your residence to the principality "does not constitute a transfer of tax residence outside of France." For any other destination, check the rules of the host country with its authorities.