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France Leaving France Tax Guide

the French exit tax and the tax implications of moving abroad. The guide covers: the exit tax (exit tax — Article 167 bis CGI) — a taxpayer who transfers their tax residence from France to another country must pay an exit tax on the unrealised capital gains on shares, warrants, and securities (the "plus-values latentes") held at the time of the transfer; the exit tax applies if: (a) the taxpayer holds shares, warrants, or securities with a total unrealised gain exceeding €800,000, OR (b) the taxpayer holds at least 50% of the shares or voting rights in a company and the value of the shares exceeds €800,000; the suspension of payment (sursis de paiement) — the taxpayer can request a suspension of payment of the exit tax until the assets are actually sold or transferred; the suspension is automatic if the taxpayer transfers to an EU/EEA country; the suspension must be requested if the taxpayer transfers to a non-EU country (the taxpayer must provide collateral — a "garantie" — to the DGFiP); the suspension lasts for a maximum of 10 years from the date of the transfer; the tax becomes due if: (a) the assets are sold or transferred within the 10-year period, (b) the taxpayer returns to France (within 5 years of the transfer), (c) the taxpayer fails to file the annual declaration (the "déclaration annuelle de suivi"); the annual declaration obligation — the taxpayer must file a "déclaration de suivi" (the "formulaire n° 2042-EXIT" or "n° 2144-EXIT") each year, for the 5 years following the transfer, listing the assets subject to the exit tax and confirming that no realisation has occurred; the step-up in basis (résidence à l'étranger) — if the taxpayer becomes a resident of a country with which France has a double tax treaty, the new country generally applies the treaty rules: the new country can tax the capital gains on assets that were owned before the move, but the treaty usually gives the taxing right to the country of residence (provided the assets are not French real estate); the French exit tax does not apply to assets acquired after the transfer of residence; the tax planning — before moving abroad, the taxpayer should: (a) sell assets with unrealised losses to realise the losses before the transfer, (b) restructure the holdings to reduce the value of the assets subject to the exit tax, (c) ensure that the "centre des intérêts économiques" is moved to the new country by moving bank accounts, professional activities, and business relationships; the French-source income for non-residents — after leaving France, the taxpayer remains subject to French tax on the French-source income: (a) rental income from French property (taxed at the progressive rate with a minimum of 20%), (b) professional income from a French activity (taxed at the standard rate), (c) French dividends and interest (subject to the withholding tax at 12.8% plus social charges at 17.2%), (d) capital gains on French real estate (subject to a withholding tax of 19% plus social charges).

The French exit tax is one of the strictest in Europe, but the suspension of payment provides relief for taxpayers who move to an EU/EEA country. All amounts in Euros (EUR). For related reading, see our Cross-Border Tax Guide → and Investment Income Tax Guide →.

Exit Tax Triggers

• €800,000 threshold: The exit tax applies only if the unrealised capital gains on the taxpayer's securities exceed €800,000 OR if the taxpayer holds more than 50% of a company's shares with a value above €800,000. The threshold is per taxpayer (not per couple).

Non-Resident Taxation (French-Source Income)

• Rental income (revenus fonciers): Non-residents are taxed on their French rental income at the progressive IR rate (up to 45%) with a minimum of 20%. The social charges (17.2%) apply on the rental income. The taxpayer can deduct the actual expenses (the "régime réel") or use the micro-foncier regime (30% deduction).
• Dividends and interest: French dividends paid to non-residents are subject to a withholding tax of 12.8% (plus social charges at 17.2% for residents of EU/EEA countries). The treaty rate may be lower (e.g., 15% under the France-US treaty, 0% under the France-UK treaty for certain dividends).

For the tax treaties between France and other countries, see the DGFiP's "Traités et conventions" page. For the annual declaration obligations for non-residents, see our Tax Filing Procedures Guide →.