France Exit Tax 2026: A Founder's Guide to Article 167 bis CGI

Updated on 13 May 2026.

Leaving France for London, New York, Singapore or Dubai has become a common move for tech founders raising abroad, family business owners preparing a sale, or executives joining a foreign group. What too few of them anticipate is that moving their tax residence out of France triggers an immediate tax bill on unrealised gains — even though no share has been sold.

Codified in Article 167 bis of the French Tax Code (CGI), the "exit tax" applies income tax and social contributions to latent capital gains on shares and securities held on the day of departure, as if the taxpayer had sold them the night before leaving.

A poorly planned departure can crystallise a six- or seven-figure tax bill before a single transaction takes place. A well-planned departure benefits from an automatic payment deferral and a full discharge after two or five years. Everything hinges on timing.

• Who is in scope: French tax residents in 6 out of 10 prior years, holding ≥ 50 % of a company OR a portfolio > €800,000 on the day of departure.
• Tax base: latent gains on shares and rights, deferred gains under prior reorganisations, and earn-out receivables.
• Payment deferral: automatic into EU/EEA states; optional with 12.8 % guarantees into other treaty states.
• Final discharge: 2 years (securities ≤ €2.57 M) or 5 years (above), provided no disposal occurs.
• Filings: Form 2074-ETD on departure, 2074-ETSL annually, 2074-ETSO upon any taxable event.

The cumulative dual threshold#

You become liable for the exit tax if you meet both of the following conditions on the day you move your tax residence out of France:

1. Residency test: you have been a French tax resident for at least 6 years during the 10 years preceding the departure (Article 4 B CGI).
2. Holdings test: you hold (directly or indirectly, alone or together with your tax household) at least 50 % of the profit rights in a company, OR a global portfolio of shares and rights with a fair market value above €800,000 on the date of departure.

The €800,000 threshold is assessed at household level and includes shares held in full ownership, bare ownership or usufruct, UCITS units, vested AGA shares and exercised BSPCE.

What is included in the tax base#

Our expert view#

The €800k threshold deceives many founders. They benchmark against their expected cash-out, while the DGFiP benchmarks against the most recent fundraising valuation. A founder owning 12 % of a company valued at €30 M in a recent Series B mechanically holds €3.6 M of latent gains, generating a theoretical bill of roughly €1.08 M at the flat tax rate. The payment deferral is decisive — but it must be prepared before the closing of the round, not after.

The tax due mirrors the disposal regime on the date of departure:

• Flat tax (PFU) of 30 % by default (12.8 % income tax + 17.2 % social contributions), or
• Progressive income tax brackets + 17.2 % if the global election is made.

For shares acquired before 1 January 2018, holding-period allowances may apply when the progressive option is chosen (50 % between 2 and 8 years, 65 % beyond, up to 85 % under the reinforced SME regime).

Worked example — A founder moving to London#

Maxime, 38, founder of a French B2B SaaS, transfers his tax residence to the UK on 1 September 2026.

• Stake held: 18 % of a company valued at €25 M after a March 2026 round.
• Value at departure: 18 % × €25 M = €4,500,000.
• Historical cost: €50,000.
• Latent gain: €4,450,000.

Since the UK is treaty-bound but outside the EU/EEA, Maxime obtains the deferral on application, by lodging a guarantee equal to 12.8 % × €4,450,000 = €569,600 with the non-resident tax office before leaving. The guarantee may take the form of a share pledge, a bank guarantee or a mortgage.

If he keeps the shares for 2 years and the value stays below €2.57 M, the tax is definitively discharged. Otherwise, the discharge period extends to 5 years.

Automatic deferral (no guarantee)#

The deferral is granted automatically and without any guarantee for moves to:

• a Member State of the European Union, or
• a state party to the EEA Agreement with a mutual administrative assistance convention with France (Norway, Iceland, Liechtenstein).

Optional deferral (with guarantees)#

For other treaty states (UK, US, Switzerland, UAE, Singapore, etc.), the deferral is granted on application made before departure on Form 2074-ETD, subject to lodging guarantees with the specialised tax collector.

Guarantee amount = 12.8 % of the gross latent gain (before any allowance).

No deferral: departure to a non-cooperative state#

If you move to a non-cooperative state or territory (ETNC list, Article 238-0 A CGI), no deferral is granted: the tax becomes immediately payable.

The most costly mistake is not the initial calculation — it is the annual monitoring after departure. Three common pitfalls:

1. Missing the annual 2074-ETSL filing: penalty = full forfeiture of the deferral, immediate payment plus 0.20 %/month interest and a 10 % surcharge.
2. Contribution or exchange of securities treated as a disposal: triggers immediate taxation. Roll-overs into a new holding after an M&A transaction are especially exposed.
3. Gifts or inheritance: a gift may carry the discharge, but only under strict anti-abuse conditions.

Action items to start at least 12 months before the planned move:

• Full patrimonial audit (shares, BSPCE, AGA, deferred gains).
• Choice of destination state (EU/EEA = automatic deferral vs other = guarantees).
• Pre-departure optimisation (BSPCE exercise timing, gifts with usufruct retention, holding restructuring).
• Setting up the guarantee (share pledge, mortgage, bank guarantee — bank fees to budget).
• Choice between flat tax and progressive scale: numerical simulation with holding allowances.
• Reviewing the applicable double tax treaty.
• Filing Form 2074-ETD by the income tax return deadline of the departure year.
• Appointing a fiscal representative for future filings if moving outside the EU.

• Finance Act 2026: no structural change to Article 167 bis, but the regime has been explicitly maintained.
• Discharge windows: departures between 2019 and 2024 are now reaching the 2- or 5-year discharge milestone (2026–2029). Watch the final 2074-ETSO filings.
• Brexit consolidated: the UK remains a treaty state but outside the EU — deferral on application with guarantees. Plan for the operational burden of pledging unlisted shares.
• IFI coordination: non-resident IFI remains due on French real estate. See our non-resident IFI 2026 guide.
• Post-departure scrutiny: the DGFiP cross-checks 2074-ETSL filings against DAC 7 and CRS data. Omissions surface quickly.

The exit tax is not a punishment on leaving France: it is a tax-neutrality mechanism between disposal at home and disposal after expatriation. The deferral neutralises the cash impact in over 90 % of cases when the move is planned. The real risk is lack of anticipation and missed annual filings.

Our firm advises around twenty founders per year on their departure, from the initial diagnosis to the final discharge filing. Contact our partners at least 12 months before your planned move.