Leaving France for Israel: tax residence, exit tax not listed in notice 2025, 1995 convention

Moving to Israel only terminates French tax residency if none of the three criteria in Article 4 B of the French General Tax Code (CGI) are met. If you hold significant securities, exit tax may apply: Israel is not included in the list of automatic deferrals listed in form 2074-ETD for 2025 transfers, and the official list does not grant it any assistance in tax collection. The 1995 convention separates residency and reserves private pensions for the state of residence. The official list does not grant Israel either residency or inheritance tax: there is no allocation of the right to tax inheritances. This page does not address Israeli tax residency, as we were unable to review the criteria at the source.

Leaving French tax residence: only one criterion is needed to remain there.

The doctrine (BOI-IR-CHAMP-10) establishes three alternative criteria: the primary residence or place of residence, professional activity carried out in France (except on a secondary basis), and the center of economic interests. The tax authorities state: "It is sufficient for one of these criteria to be met." More than six months of presence in the year generally designates the primary residence, but this is not an absolute criterion. Maintaining a residence in France, a professional activity (except on a secondary basis), or the center of one's economic interests may be sufficient to remain domiciled in France, regardless of the time spent in Israel. Conventions take precedence over domestic law.

Exit tax: Israel is not on the list in notice 2025

The exit tax levies capital gains on securities upon transfer of tax residence. Two conditions apply: having been domiciled in France for at least six of the ten preceding years, and holding securities worth more than €800,000 (the explanatory note states "greater than," the information sheet "at least": the threshold is verified) or at least 50% of the profits of a company. The rate is 12.8% for income tax, plus social security contributions at a total rate of 18.6% for departures in 2026.

Three observations specific to Israel.

• List of automatic deferments. Notice 2074-ETD lists, in addition to the European Union member states, the states whose stay of execution is automatic, from South Africa to Ukraine. Israel is not included. The notice makes this stay, outside the European Union, conditional upon agreements on administrative assistance and assistance in debt recovery, and on the absence of non-cooperation on the part of the state.
• Israel line in the BOI-ANNX-000508 list. Clause for the exchange of information for income tax, corporation tax and IFI, no clause for assistance in recovery (October 8, 2025).
• Non-cooperative states. Israel is not included in the 11 States and territories in the list included in the annex to the draft budget law for 2027, updated by the decree of April 15, 2026 (decree not read).

Except in cases where automatic deferral is required, the instructions provide for an optional deferral: filing of form 2074-ETD within 90 days preceding the transfer (instructions) or at the latest 90 days before (fact sheet); filing with a tax representative established in France; providing security equal to 12.8% of the total capital gains and receivables, filed with the non-resident tax office; additional tax if the tax calculated according to the tax brackets exceeds the security. Form 2074-ETD is only available in paper format. These instructions apply to transfers in 2025: for your departure year, please refer to the applicable instructions.

The tax relief is granted after 2 years (for securities valued at less than €2,570,000) or 5 years (for securities valued at more), provided the securities are held. According to the tax authorities' information sheet, if there is no sale, redemption, cancellation, or liquidation during this period, the tax is either waived or refunded.

What the 1995 convention changes on the date of departure

The France-Israel convention is detailed on our dedicated page. Four points are required for departure.

• Residence (Article 4 § 2). If both States consider you a resident: permanent home, center of vital interests, habitual residence, nationality, agreement of the authorities.
• Pensions (Article 18). Private pensions are taxable only in the recipient's country of residence; Article 19, paragraph 2, reserves the taxability of public pensions to the paying state. The "I'm moving abroad" fact sheet on impots.gouv.fr advises you to ask your pension fund or pension provider to clarify the nature of your pension. For a French private pension received by a resident of Israel, Article 18 designates Israel; this applies to your situation.
• Substantial participation (Article 13 § 2). For 10 % of capital or more (25 % for a family company), the state of the company may tax the gain, up to a limit of 18 %. Other gains fall under the jurisdiction of the state of residence of the transferor (§ 5).
• Inheritance. The official list is "IR – IF" for Israel, without "S" or "D"; Article 24 § 6 deals with exemptions from gift and inheritance taxes, without allocating the right to tax. Our page on inheritance and gift tax treaties details the countries covered.

What France continues to impose after departure

A non-resident is taxed only on their French-source income, subject to tax treaties: rental income from buildings in France, income from activities carried out in France, capital gains on real estate, and pensions and retirement benefits paid by a payer established in France. The tax brackets include minimum rates of 20% up to €29,579, then 30% for income received in 2025, with the option of the average rate. Dividends from French sources are subject to a withholding tax of 12.80% (rate in effect as of January 1, 2026), subject to the tax treaty; the treaty ceiling of 15% is higher. For the French wealth tax (IFI), the non-resident is taxed only on their real estate located in France, exceeding €1,300,000 of net taxable assets as of January 1, subject to tax treaties; the treaty text refers to the former wealth tax (ISF), not the IFI.

The year of departure: one or two statements

Form 2042 reports your income from January 1st to your departure date; foreign-source income is declared on form 2047. Form 2042-NR reports only taxable French-source income from your departure date to December 31st. As soon as you have taxable French-source income, the Non-Resident Tax Office becomes your tax administrator and also manages your French wealth tax (IFI) from your departure date. Property taxes remain the responsibility of the tax office in the location of your property. Update your address in your online account and contact the Israeli tax authorities regarding your local tax obligations.

On the Israeli side: national insurance and health funds

What we were able to read on the Israeli side pertains to social security. CLEISS indicates that every Israeli resident over 18 contributes, regardless of their status (with exceptions, notably for unemployed married women), and that everyone is enrolled in one of four health insurance funds: Clalit, Leumit, Maccabi, or Meuhedet. The self-employed are covered for all risks, except unemployment and employee bankruptcy insurance.

The reduced rate applies below 60% of the average salary (7,522 ILS per month); the monthly ceiling is 50,695 ILS. The 2026 tax brackets have not been reviewed.

The France-Israel social security agreement "does not provide for coordination in matters of health insurance or disability insurance," and unemployment insurance is not covered. For old age, the individual chooses between two prorated pensions and two national pensions. The Israeli National Insurance Institute defines residency by the individual's center of life, using both objective and subjective tests, and requires a residency status that grants the right to residency (citizenship, permanent residency, or certain visas). This is residency in the sense of national insurance, not tax residency. Israeli residency and tax regulations are available from Israeli sources; we were unable to consult them.

Portfolio of €1.2 million and exit tax: a numerical example (fictitious profile)

Situation. A Lyon-based executive, a fictitious profile, residing in France for over six years, holds shares worth €1,200,000 acquired for €400,000. He moves to Israel on December 1, 2026.

Issue. He wants to assess the implications of the exit tax, the guarantees of a deferral on request, and the date of a possible tax relief.

Strategy. He applies the rates in the notice to the unrealized capital gain of €800,000 and compares the value of his securities to €2,570,000.

Result. Income tax at 12.8% (%) amounts to €102,400; social security contributions at 18.6% (%) are added for €148,800, totaling €251,200. Security interests at 12.8% (%) of the total capital gains would represent €102,400. Since his securities are worth less than €2,570,000, the tax relief period would be 2 years, i.e., December 1, 2028, if he retains the securities. With securities worth €3,000,000, the period would be 5 years, i.e., December 1, 2031. This profile is hypothetical, uses the 2025 transfer guidelines, and does not prejudge any actual situation.

Leaving France for Israel: what changes depending on your situation

• The date of the transfer and the value of your securities on that date.
• Your links with France at the date of departure: home, activity, economic interests.
• The nature of your French-source income after departure.
• The nature of your pensions and the debtor who pays them.
• Israeli rules regarding residence, residency permits and taxes, to be validated with a local professional.

The rule depends on your situation. No results are guaranteed.