France Exit Tax 2026: Article 167 bis CGI, Latent Capital Gains and Payment Deferral

Exit tax in plain English: what Article 167 bis CGI actually does

The French exit tax under Article 167 bis of the Code Général des Impôts (CGI) was introduced in 2011, reformed in 2019, and adjusted again for 2026. It treats certain unrealised capital gains as if they had been realised on the day before you stop being a French tax resident — and taxes them at 30% (the Prélèvement Forfaitaire Unique, or ”flat tax”) plus 17.2% prélèvements sociaux if you were socially affiliated in France. In effect: 12.8% income tax + 17.2% social charges = 30% combined on latent gains.

The rule is anti-abuse. France wants to prevent residents from selling shares the day after moving to a low-tax jurisdiction. Triggers apply only if you held qualifying shares for at least 6 years out of the 10 preceding your departure AND you held at least 50% of a company OR a portfolio worth more than €800,000 at departure date.

Who is affected — and who is exempt

Affected: shareholders, founders, fund managers, and high-net-worth individuals whose shareholdings cross the €800,000 threshold or the 50% ownership threshold. The latent gain is computed as the difference between fair market value at departure date and acquisition cost. Stock options, RSUs, and BSPCE are included if vested at departure.

Exempt: shares in PEA (Plan d’Épargne en Actions), PEE (Plan d’Épargne Entreprise), PER (Plan d’Épargne Retraite), real estate, life insurance contracts (these have separate rules under Article 200 A CGI), and most cryptocurrencies (subject to Article 150 VH bis CGI for declared holdings only).

Sursis de paiement (deferral): if you move to an EU/EEA country with a tax treaty with France, payment is automatically deferred without guarantees. If you move outside the EU/EEA (USA, UK, Switzerland, Singapore, UAE, etc.), you must provide a financial guarantee — typically a bank guarantee from a French bank — equal to 12.8% of the latent gain. This is one of the main administrative costs of the exit tax.

The 2026 thresholds and computation

The disgorgement clause: how to legally avoid the exit tax

The exit tax is fully cancelled if you keep the shares for: 2 years after departure if you moved to an EU/EEA country with a French tax treaty, or 5 years if you moved elsewhere. This is the dégrèvement mechanism. After the holding period expires, the latent gain is wiped from your fiscal account and the deferred tax discharged — even if you sell the shares later, only the post-departure capital gain is taxable in your new country of residence (subject to local rules).

If you sell the shares before the disgorgement period expires, the deferred exit tax becomes payable immediately, plus any post-departure gain is also taxed. If you return to France within the holding period and re-establish tax residency, the exit tax is automatically cancelled regardless of timing.

Filing obligations: forms and deadlines

You must file Formulaire 2074 ETD together with your final French income tax return for the year of departure (typically due 31 May of year N+1 for paper filing or 8 June for online via impôts.gouv.fr). The form lists each shareholding, acquisition cost, fair market value at departure, and computed latent gain. You also indicate whether you request the sursis de paiement and provide guarantee details if applicable.

Each year thereafter, until the disgorgement period expires, you must file Formulaire 2074 ETS declaring any sales, transfers, or events affecting the deferred tax. Failure to file the annual ETS triggers immediate payment of the deferred exit tax plus a 5% late penalty under Article 1727 CGI and 0.20% monthly interest.

Practical strategies before departure

1. Crystallise the basis. If your portfolio is below €800,000, consider postponing departure or restructuring to stay below the threshold. If above, consider partial sale of shares before departure to use the existing 30% rate (which is still lower than many destination countries’ capital gains rates).

2. Use the PEA shelter. Shares held in a PEA (5-year hold minimum) are exempt from exit tax and from French income tax. The PEA continues to grow tax-free for the French portion even after you leave. Maximise contributions before departure (€150,000 ceiling).

3. Time the move strategically. Tax residency in France is determined by the calendar year. If you can complete the move in early January, you have a full year of foreign residency before the next French tax filing — useful for cash flow planning around the exit tax computation.

4. Get the guarantee right. For non-EU destinations, the bank guarantee can be expensive (typically 0.5-1% of the secured amount per year). Compare quotes from BNP Paribas, Société Générale, Crédit Agricole, and LCL — terms vary widely. Some private banks waive the guarantee for clients with custody of more than €1M in assets.

5. Engage a fiscaliste. Exit tax computation is complex and the 2074 ETD has high error rates. Budget €2,000-5,000 for a chartered tax advisor in the year of departure — much cheaper than penalties or wrong guarantees.