France Exit Tax 2026: Rate, Thresholds & Sursis Automatique for Cyprus

France exit tax (impôt sur les plus-values latentes) applies when a French tax resident moves abroad and holds shares above certain thresholds. Under Article 167 bis of the General Tax Code (CGI), unrealised capital gains are crystallised and taxed at the moment you leave, even though you have not sold anything.

The good news for anyone moving to Cyprus: as an EU member state, Cyprus gives you the right to automatic deferral (sursis d'imposition) under French law. You owe zero tax at departure. The liability follows you and is only cancelled when you meet the holding-period rules, 2 years for portfolios below €2.57 million, 5 years above. This page covers the mechanics, thresholds, and calculation rules. For the German equivalent seeGermany exit tax (Wegzugsbesteuerung).

If you are planning the full relocation, not just the exit tax, see theMoving from France to Cyprus complete guide, which covers deregistration, the foyer fiscal rules, Yellow Slip, GESY, and the Non-Dom application process.

What Triggers France Exit Tax?

Exit tax applies if you meet ALL three of the following conditions at the time of departure:

Condition 1, French tax residency for at least 6 of the last 10 years.

This is based on fiscal domicile (domicile fiscal), not physical days. If your family remained in France (foyer fiscal) or your main economic interests were there, the clock runs even in years you spent partly abroad.

Condition 2, Portfolio value above €800,000 OR ownership above 50% of a company's capital or voting rights.

French exit tax (Exit Fiscale), key facts:

• Applies to individuals who have been French tax resident for at least 6 of the last 10 years
• Triggered by departing France and taking up residence in another country
• Covers: shareholdings ≥50% in companies, and any securities portfolio with unrealised gains >€800,000
• Tax rate: 30% flat tax (PFU) on deemed capital gains, or progressive rates by election
• Deferral: moving to another EU/EEA country allows automatic deferral, no tax until shares are actually sold
• Cyprus qualifies for the French deferral (EU member), effective tax date deferred until actual disposal
• The deferral lapses if you move to a non-EU/EEA country within 5 years of departure from France

Either threshold triggers exit tax independently, you do not need both. The €800,000 threshold is assessed across all in-scope securities, not per company. The 50% threshold applies to participation in a single company.

Condition 3, Unrealised capital gain exists at the date of departure.

If your acquisition cost equals or exceeds market value, there is no gain and exit tax does not apply. The relevant date for valuation is the day you cease to be a French tax resident.

How Is France Exit Tax Calculated?

The rate is 31.4% for 2025 and 2026, composed of:

The net capital gain is calculated as: market value at departure − acquisition cost (adjusted for any capital contributions or return of capital). Corporate liabilities do NOT reduce the taxable gain; the calculation is on the equity value, not net assets.

Example: you hold 60% of a SAS valued at €5 million. Your acquisition cost was €200,000. Net gain = €5,000,000 × 60% − €200,000 = €2,800,000. Exit tax at 31.4% = €879,200. Under sursis (moving to Cyprus), this €879,200 is deferred, not paid.

Sursis d'Imposition: Why Moving to Cyprus Means Zero Tax at Departure

France applies sursis d'imposition automatically to taxpayers who move to an EU or EEA member state. Cyprus is an EU member state. This means:

1. You declare the exit tax liability on your final French tax return (Form 2074-ETD), but pay nothing at the time of departure.

2. No bank guarantee or surety is required. This is the critical difference from moving to a non-EU country (e.g. Switzerland, UAE), where France requires a financial guarantee covering the full exit tax liability before you leave.

3. The liability travels with you. If you later move from Cyprus to a non-EU country, France will reassess whether the sursis conditions are still met.

When Is the France Exit Tax Cancelled?

Sursis is not permanent, it converts to full cancellation when you meet the holding-period conditions:

Using the case study above (60% of a €5M company, departure gain €2.8M): the portfolio value at departure is €3M (60% × €5M), which exceeds €2.57M. The holding period is therefore 5 years. If you still hold those shares 5 years after becoming a Cyprus resident, the entire €879,200 exit tax liability is cancelled. You never pay it.

The liability is also cancelled if you sell the shares after the holding period while a Cyprus resident, French exit tax is extinguished and only Cyprus CGT rules apply. Cyprus does not tax capital gains on shares, so the effective rate is 0%.

France-Cyprus Double Tax Treaty: Current Status

The current France-Cyprus convention dates from 1981. A new bilateral tax treaty was signed on 11 December 2023 but had not been ratified by either parliament as of the date of this article.

Until ratification, the 1981 convention governs. Under both the current and new treaty, France retains source-state taxing rights over exit tax on shares in French companies, the treaty does not eliminate French exit tax. What the new treaty does change is the tiebreaker rules for dual residents and the updated exchange of information provisions.

Practical implication: the sursis mechanism (EU automatic deferral) exists in French domestic law, not the treaty. It applies to Cyprus regardless of which convention is in force.

PLF 2026, Was Exit Tax Extended?

The 2026 Finance Bill (PLF 2026) contained a proposal to extend the holding period to 15 years for portfolios above €2.57M. This proposal was debated but was not enacted. The current rules (2 years / 5 years) remain in force for 2026 and 2027 pending any future legislative change.

France vs Germany vs Netherlands: Exit Tax Comparison

France is unique in having true cancellation by conservation: if you hold the shares long enough as a Cyprus resident, the tax disappears entirely. Germany only defers, you pay eventually in 7 annual instalments, unless you return to Germany. See the fullGermany exit tax guide for §6 AStG details.

Practical Checklist for French Entrepreneurs Moving to Cyprus

1. Assess whether you meet both triggers (6-of-10 years French residency AND €800K portfolio or >50% participation).

2. Get a valuation of your company as at the date you cease French residency (critical for the calculation).

3. File Form 2074-ETD with your final French income tax return. Do not skip this even if you owe nothing.

4. Establish Cyprus tax residency in the same year as departure. See the Cyprus 60-day rule for how to qualify without spending 183 days.

5. Apply for Non-Dom status in Cyprus in your first Cyprus tax year. Non-Dom is not automatic.

6. Track the 2-year or 5-year holding period from your departure date. Do not restructure or sell before the period ends without French tax advice.

7. Break foyer fiscal in France, if your spouse and minor children remain, France may still consider you a French resident regardless of where you live.

For the full picture on Cyprus tax after your move, see Cyprus Non-Dom status and the Cyprus corporate tax guide.