Since 1st January 2025, the Exit Tax – a tax mechanism regulating the transfer of tax residence outside France – has undergone notable adjustments.
Reminder of the principle
The Exit Tax aims to prevent tax avoidance by taxing unrealized capital gains on securities held by taxpayers leaving France.
It applies if two conditions are met:
- Having been a French tax resident for at least 6 of the last 10 years;
- Holding securities with a total value exceeding €800,000 or representing at least 50% of the rights in a company.
What’s changing in 2025
The reform effective 1st January 2025 strengthens the targeting of the mechanism while simplifying certain procedures:
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1 – Reduction of tax relief periods
The period after which the taxpayer can benefit from automatic relief in the event of non-disposal of securities is now set at:
- 2 years if the value of the securities is below €2.57 million;
- 5 years if above this threshold.
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2 – Extension of scope
Shares in real estate–focused companies are now fully included in the mechanism if these companies are subject to corporate tax.
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3 – Strengthening of Reporting Obligations
Form n°2074-ETD* remains mandatory at departure, but simplified follow-up via form 2074-ETSL is now possible for taxpayers benefiting from deferred payment.
* Form for declaring unrealized capital gains, receivables arising from an earn-out clause, and capital gains subject to deferred taxation in the event of a transfer of tax residence outside France.
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4 – Deferred Payment
Deferral remains automatic for departures to the EU or to a state that has signed an assistance convention with France. For other destinations, a formal request is still required, to be submitted 90 days before departure.
Why consult our COGEP experts?
The Exit Tax can have a significant impact on your wealth. Our COGEP experts supportyou in:
- Assessing unrealized capital gains and/or those under deferred taxation;
- Choosing the most suitable tax regime;
- Preparing mandatory declarations;
- Anticipating wealth and inheritance consequences.
Conclusion
The 2025 version of the Exit Tax increases tax vigilance around expatriations. Careful planning, supported by a professional, is more essential than ever to avoid unpleasant surprises.
