Exit Tax 2026: Who is affected and how to prepare for it?

The exit tax is the first obstacle a French entrepreneur faces when considering leaving the country with a significant portfolio of securities. If poorly planned, it transforms a well-considered departure into an immediate tax burden. If managed properly, it is neutralized in the vast majority of cases.

Understanding its conditions is the condition for a controlled departure.

What is the exit tax?

The exit tax is a French tax mechanism. It taxes unrealized capital gains on certain shareholdings when a taxpayer transfers their tax residence outside of France.

The logic is anti-abuse. The objective: to prevent an executive from leaving France just before selling their shares in order to avoid French capital gains tax.

The key point to understand is that the tax is levied on a latent capital gain. That is, a gain that hasn't been realized. You haven't sold anything. However, the tax authorities consider that you fictitiously "realize" the capital gain on the day you leave.

Capital gains tax is levied before any sale.

This is what surprises most business leaders. You own shares in your company. You leave. You don't give up anything. And yet, the tax may become due.

This gap between the absence of a sale and the taxation explains why the exit tax must be analyzed months before departure — never after.

Who is affected in 2026?

The exit tax applies when three conditions are met cumulatively.

Condition 1 — Length of residence

You must have been a French tax resident for at least six of the ten years preceding the transfer of residence.

This condition excludes expatriate executives who return home after a short stay in France. It targets taxpayers who are permanently established in France.

Condition 2 — The asset threshold

Two separate entrances:

• Securities and equity interests with a total value exceeding €800,000 on the day of departure.

• OR a stake representing more than 50% of the shares of a company.

These two thresholds are alternative. An executive holding €900,000 in securities accounts is affected, even without ever having controlled a company. Conversely, a manager who owns 80% of a simplified joint-stock company (SAS) worth €500,000 is also affected—even though their shareholding does not reach the €800,000 threshold.

The €800,000 threshold is a trigger threshold, not a tax allowance. Once exceeded, all unrealized capital gains become taxable, starting from the first euro.

Condition 3 — The effective transfer

The transfer of tax residence outside of France must be genuine. A fictitious residence not only triggers exit tax but also exposes one to a much broader tax reassessment.

What is taxed — and what is not

The target base for the exit tax is specific assets.

The assets concerned

• Shares, equity interests and securities of companies (SAS, SARL, SA, listed securities).

• Certain receivables and similar securities.

Assets outside scope

• Unrealized capital gains on crypto-assets are not subject to the exit tax applicable to equity investments. They are governed by their own specific tax regime.

• Securities held in a life insurance contract are outside the scope: the unrealized capital gain on the contract is not a capital gain on securities within the meaning of article 150-0 A of the CGI.

This distinction is central to any pre-departure structuring strategy.

What is the tax rate?

Unrealized capital gains are subject to a flat tax rate. This tax combines income tax and social security contributions applicable to capital gains on securities. The progressive tax scale remains an option, with a holding period allowance for securities acquired before 2018.

At high levels of wealth, contributions on high incomes may be added. This is why a personalized calculation is essential: no single rate applies uniformly to all profiles.

The mechanisms of deferral and tax relief

This is where the difference lies between a paid exit tax and a neutralized exit tax.

The payment deferral

The deferral suspends the tax liability.

• Automatic suspension for transfers to a Member State of the European Union or the EEA, as well as to certain States that have signed an assistance agreement — Switzerland in particular.

• Deferral available upon request for other destinations, subject to guarantee conditions.

A destination like Dubai does not automatically grant a stay of execution. A stay of execution is possible upon request, with the provision of guarantees. This point must be considered from the initial analysis phase.

The tax relief

If the securities are not sold within a certain period after departure, the tax is waived — it disappears.

The time frame depends on the value of the securities: two years for securities portfolios below approximately €2.57 million, five years above that.

In practical terms: a manager who leaves without selling their shares, retains them beyond the applicable deadline, and fulfills their reporting obligations will avoid the exit tax. This is the most common scenario when the departure is not linked to an imminent sale.

How to anticipate the exit tax

A well-managed exit tax requires advance preparation. Never be rushed.

Mapping the Exposure

The first step is to accurately measure the portfolio: value of the securities, cost price, unrealized capital gains, and ownership structure. This mapping determines the entire strategy.

This analysis is an integral part of our method , from the initial case analysis stage.

Coordinate the timeline with a potential sale project

Timing is crucial. A sale planned within months of departure radically changes the equation. Anticipating any major financial event by at least six months is the rule. Less than six weeks before a sale, certain options become unavailable.

Securing the tax break in the long term

The exit tax cannot be analyzed in isolation. It is part of the overall coherence of the tax transition: established actual residence, fulfillment of reporting obligations, and retention of supporting documents throughout the entire tax relief period. It is this consistent approach over time that secures the final tax relief—a key aspect of our post-relocation support .

The most costly mistakes

Leaving without having calculated the exposure

Discovering the exit tax after leaving means being subject to an unbudgeted tax on a capital gain that you haven't received.

Confusing exit tax and income tax

The exit tax applies only to unrealized capital gains on shareholdings. It does not apply to current income.

Neglecting reporting obligations

The suspension and tax relief require accurate declarations to be made within the specified time limits. Failure to comply may result in the loss of the benefit.

The exit tax in a global strategy

Exit tax is just one component of a structured departure. It is linked to tax residency , the treatment of real estate assets, bank account management, and applicable tax treaties. None of these aspects can be addressed in isolation.

This is precisely the function of coordination: to maintain coherence so that the strategy withstands close scrutiny. To situate the exit tax within the broader context of international taxation , each case requires a combined analysis of French law and bilateral conventions.

The exit tax is frightening. It shouldn't be. If anticipated, it's offset in most situations. If imposed, it becomes an immediate and avoidable cost. The difference lies in the upfront analysis.

Assessing your exposure to exit tax is the first step towards a smooth departure. Coreway systematically analyzes this aspect in every departure case.